Medium Density Fiber Report

Techno-Economic Feasibility report ofMott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. 1, Krinkal Apartment, Mahalaxmi Society, Paldi Ahmedabad Gujarat 380007 Techno-Economic Feasibility Report of Medium Density Fibre Board January 2007 Mott MacDonald 501, Sakar II Ellisbridge Ahmedabad, Gujarat India 380001 Tel: +91-79-26575550 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report - Amended 26th Nov 2007.doc/ Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report - Amended 26th Nov 2007.doc/ Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Techno-Economic Feasibility Report of Medium Density Fibre Board This document has been prepared for the titled project or named part thereof and should not be relied upon or used for any other project without an independent check being carried out as to its suitability and prior written authority of Mott MacDonald being obtained. Mott MacDonald accepts no responsibility or liability for the consequence of this document being used for a purpose other than the purposes for which it was commissioned. Any person using or relying on the document for such other purpose agrees, and will by such use or reliance be taken to confirm his agreement to indemnify Mott MacDonald for all loss or damage resulting therefrom. Mott MacDonald accepts no responsibility or liability for this document to any party other than the person by whom it was commissioned. To the extent that this report is based on information supplied by other parties, Mott MacDonald accepts no liability for any loss or damage suffered by the client, whether contractual or tortious, stemming from any conclusions based on data supplied by parties other than Mott MacDonald and used by Mott MacDonald in preparing this report. P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report - Amended 26th Nov 2007.doc/ . 1 Raw material Types 50 4.3 Indian Market 27 3.4 Description of Substitutes 14 Market Study 20 3.doc/ .2 Prelam MDF Board 13 2. List of Contents Page Executive Summary Chapters and Appendices 1 2 3 4 5 Introduction 1 1.2 Cotton Production 50 4.5 Other Relevant Issues 46 Raw Material Assessment 50 4.5 Consultant’s Background 4 1.1 Study Background 1 1.2 Project Description 1 1.3 Cotton stalk 55 4.1 Medium Density Fibreboard 10 2.7 Approach and Methodology 6 1.6 The Scope of Work 6 1.8 Caveats 9 Product Description 10 2.Amended 26th Nov 2007.4 About the Promoters & Management 3 1.4 Indian Scenario on Furniture 38 3.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.2 67 Manufacturing Process of Prelam Boards: P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .3 Background of the Firm 2 1.4 Bagasse as Alternate Raw Material 61 Technological Aspects 64 5.2 Laminate Flooring Market 24 3.3 Laminate Flooring 14 2.1 Global Scenario for MDF 20 3. Repayment & Interest 105 Appendix D: Unsecured Loan .4 Cash flows& Profitability Statement 97 8.1 SWOT Analysis 77 6.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Pay back 101 8.2 Five-Force Model Analysis 79 Marketing Strategy 82 7. DSCR.1 Present Marketing Set Up 82 7. 6 7 8 9 5.NPV.6 Sensitivity Analysis 101 Conclusion and Recommendations 102 Appendix A: Fixed Cost Allocation of Contingency and POP expenses 103 Appendix B: Working Capital Statement 104 Appendix C: Term Loan .4 Location Aspects 68 5. IRR.2 Means of Finance 92 8.1 Estimation of Capital Cost 88 8.3 Assumptions 93 8.5 Financial Indicators.Amended 26th Nov 2007.2 Formulation of Marketing Strategy 85 Financial Modelling & Analysis 88 8.3 Manufacturing process of Laminated Flooring 67 5.doc/ .5 Machinery Details 71 Strategic Analysis of the Firm 77 6.Interest 106 Appendix E: SLM Depreciation 107 Appendix F: WDV Depreciation 108 Appendix G: Tax Statement 109 Appendix H: Debt Service Coverage Ratio 110 Appendix I: Pay Back Period & Internal Rate of Return 111 Appendix J: Availability of Bagasse 113 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . 3: Global Particleboard Demand – Supply Balance 3. List of Figures Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure 1.1: Cotton Production area and yields of India and U.10: Furniture Production Break up 3.1: MDF Consumption in China 3.2: Wood Products & competitors life cycles 6.9: Raw material used in furniture 3.5: Production of Laminate Flooring in Europe 3. 4.3: India’s Cotton Production Yield 4.1: Approach and Methodology 2.2: Global MDF Demand – Supply Balance 3.12: Country wise break up of export of Indian furniture 3.1: SWOT Analysis 6.1: Substitutes of MDF 3.14: Country wise break up of imported furniture in India 3.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.1: Present Marketing Set up P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .13: Product wise break up of Indian furniture export 3.2: India’s Cotton Production and Production area 4.6: Market Volumes of Laminate Flooring in North America 3.5: CCS Centre Mechanism 5.4: World Production of Laminate Flooring 3.16: Break up of the round wood consumption in India 3.7: Market Volumes of Laminate Flooring in Asia – Pacific 3.17: Imports of Veneer & plywood in India (In US $ ‘000) 3.Amended 26th Nov 2007.1: Techno Economic parameter for machinery selection 6.4: Gujarat’s Cotton Production Yield 4.3: Five Force Model 7.15: Product wise break up of imported furniture in India 3.S.18: Import of MDF/HDF & Particle Board in India (In US $ ’000) 4.11: Import – Export of Furniture in India 3.doc/ 8 15 21 23 23 24 25 26 26 39 39 40 41 41 42 42 43 44 45 46 50 51 52 53 60 71 77 78 79 82 .8: Furniture Productions in Billion Euros 3. 12: Operating norms for Prelam MDF Board manufacturing 8.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.2: IS Specification of MDF Board 2. imports & apparent consumption.3: Indian log production.1: List of Imported Machinery 5.Amended 26th Nov 2007.11: Operating norms for Fibre Board manufacturing 8.6: Sugarcane Productions in Gujarat 5.2: Production and trade of MDF in the Middle East 3.16: Cash flow Statement 8.5: Preoperative and Preliminary cost break up 8.3: Wood& Agro-based products and their application 2.3: Cotton Productions in Surendranagar District 4.13: Operating Norms for Laminated HDF Flooring Manufacturing 8.15: Profitability Statement 8. List of Tables Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table 2.9: Capacity Utilisation in phase 1 8.5: Indian imports of wood products. 2003 3.1: Cotton production 4.4: Characteristics comparison of different products 3.4: list of other plant and machinery 8.10: Capacity Utilisation in phase 2 8.3: List of Indigenous machinery 8.14: Repayment of Long Term Loan 8.8: Means of finance 8.1: Classification of Board based on Density 2.2: List of Indigenous Machinery 5.1: Building and Civil Work 8.5: CCS Centre locations 4.4: Cotton Production in different talukas of Surendranagar 4.6: Inventory norms 8.3: List of other plant and machinery 7. 2002 -2003 4.2: The present marketing network of RDPL in world 8.4: Demand supply gap of wood 3.7: Total Cost of Project 8.doc/ 10 11 17 18 20 22 43 44 44 52 54 55 58 59 62 72 72 72 83 84 88 89 89 90 91 91 92 92 93 93 95 95 95 96 97 99 101 101 .17: Financial Indicators 8.2: List of imported Machinery 8.1: Region wise MDF production 3.2: District wise cotton production in Gujarat 4.1: The present marketing zones of RDPL in India 7.18: Sensitivity Analysis P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . The technology and major machinery will be sourced from Germany and China. Executive Summary Rushil Group (herein after referred to as client or RDPL) has a well established market in the decorative laminate business in India and abroad. which can be easily procured from South Gujarat and Saurashtra. post-sales customer support. preservation of forests and employment generation.Amended 26th Nov 2007. They are planning to make forays into the manufacturing of MDF (Medium Density Fibreboard). There are only two players in the domestic market that manufactures MDF.doc/ . scalability. the cost-competitiveness and the established brand equity will play a vital role. In this respect. the market for MDF is growing at an impressive rate of 20-25% p. Parameters such as contemporariness of technology. Ideally 850 to 870 saplings can be planted per acre of land and will be ready for felling in a span of 4 years. Based on market information. The client also plans to grow ailanthus excelsa or other kind of soft wood tree near the factory premises in a vast expanse of land so that the wood from the same can be used as raw material for MDF. The long-term relationship the client enjoys with many dealers in India and around the globe. RDPL is envisaged to export nearly 60% of the product to favourable market P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . In the light of the above facts.55 tons of trees are needed to produce 1 cubic metre of MDF. a well-established distribution channel will help the firm to push their new products into the market in a cost effective way. Every year. bagasse is being considered as the raw material for MDF production. 1.a. laminate flooring and prelam boards. import substitution. energy efficiency. Alternatively. promotion of rural economy. especially in Europe can be leveraged further to sell/export the products from India. On an average. The typical yield is 100 tons per hectare. which is famous for cotton cultivation. etc had been taken into account while choosing the technology. Rushil can look forward to reap the benefits of early mover advantage.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. MDF worth US$ 67. This related diversification drive not only offers synergy in operation but also provides a sea of opportunities in terms of value addition. Manufacturing MDF from cotton stalks will be the first of its kind in India that will offer cost advantages in terms of production. RDPL is planning to set up manufacturing unit at Surendranagar. Further to this.5 million are being imported to India which meets almost 75-80% of the total domestic demand. Also the surrounding areas are cotton-abundant. Venezuela. destinations around the globe. USA. The international marketing network of the RDPL is spread in 34 countries including Canada. Australia. P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . Europe. Far East countries.doc/ . and Gulf countries with the strong brand name of “Rushil Décor”.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.Amended 26th Nov 2007. 1. promotion of rural economy. In the client’s endeavour for related diversification into MDF manufacturing. This offers a sea of opportunities in terms of value addition. Rushil Group (herein after referred to as client or RDPL) is planning to make forays into the manufacturing of MDF (Medium Density Fibreboard). technology selection. Being a visionary company. import substitution. impregnation line and resin plant. employment generation. risk management and strategy formulation.Amended 26th Nov 2007. RDPL has selected foreign machinery suppliers for their requirement. means of finance.1 Introduction Study Background Since its inception in 1992. revenue modelling. The location identified for the project is Navalgarh village in Dhangadhra taluka of Surendranagar district.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. the Rushil Group of companies have created a niche for themselves in the laminates business in India. RDPL has also finalized major machinery suppliers and purchase order has been placed for MDF manufacturing plant. India’s impressive economic growth rate and the thrust on infrastructure development are potential growth drivers for the construction materials in general and laminate in particular. they have been continuously innovating themselves in terms of product quality and services to the customers worldwide. creating value for its stakeholders. quality and price competitiveness. etc. At the same time. 1 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . supply chain management. 1 1. The land acquisition process is finalized and RDPL has purchased 67 acres of land. raw material sourcing. short cycle press. This study will focus on the issues of market demand. Mott MacDonald (herein after referred to as the consultant) would prepare a detailed technoeconomic feasibility report for the project. it has tapped the right opportunities so far in increasing the market share and the export volume. laminate flooring and prelam boards. thereby increasing the profits for the firm. preservation of forests.doc/ .2 Project Description RDPL is planning to set up manufacturing unit of MDF and HDF board and their downstream products like Prelam MDF board and Laminated HDF flooring. By considering the expertise of manufacturing machinery. The first phase will commence from October 2007. The firm produces laminated sheets. while second phase is expected to be commissioned in October 2008. RDPL will manufacture laminated flooring with imported High Density Fibre (HDF) board and in the second phase. prelam boards and door skins in their state-of-the-art facilities at Mansa of Gandinagar District. With a well-known product brand ‘Rushil décor premium laminate’.100% increase in sales compared to the previous year • 1994 – company’s first export to Bangladesh 2 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . The project has certain advantages due to its location and raw material used for manufacturing Fibre board. RDPL is also considering social forestry route to meet its future requirement of raw material. 2. Rushil pioneered Indian laminate industry into export market through the adoption of the flexible global business practices that today enable the company to operate more efficiently and to produce more value to its stakeholders. The project will be implemented in two phases.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.Amended 26th Nov 2007. almost 34 countries are being served by our comprehensive range of products as well as services.doc/ . project come under the agro industry and become eligible to get incentives from the Government of Gujarat.8 million sheets per annum. Vir is a favourable brand for Indian architects and interior designers. when Indian laminate industry started serving to the global markets. The raw material selected for the project is agro waste like cotton stalk and bagasse. “Vir Laminate” from the stable of Rushil Group is one of best known brand in the laminate space and the company is one of India’s leading decorative laminate manufacturing companies. RDPL will manufacture Prelam MDF board and HDF laminated flooring with in-house manufactured MDF and HDF board. Ghanshyam Thakkar & his son Mr. Krupesh Thakkar • 1992 . 1.3 Background of the Firm Rushil Group of companies commenced operations in 1992. In first phase.annual turnover of Rs. The plant is capable of churning out 4. A large number of private & public sector corporate companies spread across the length and breadth of the country are customers of the group. (1st laminate manufacturing facility) established by Mr. Ltd. Due to the raw material selection. Milestones • 1992 – Rushil décor Pvt.5 crores in the first year • 1993 . Thakkar and Mr. • 2003 . product and project development.Mica Rushil Pvt. • 2003 – Company’s export reached to 34 countries. exports and sales. Similarly it has an 3 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . • 2006 – (4th laminate manufacturing facility) established. Mumbai).Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. (3rd laminate manufacturing facility) established. Mr. International Business Development is a thrust area that will help RDPL to tide over any slack in domestic demand that may arise in future.2nd manufacturing facility for prelam started (Vertex Laminate Private Ltd. 1. • 2005 .doc/ . • 2005 – Erection of short cycle laminates plant (1st prelam manufacturing facility).Production of ‘Vir Prelam’ boards started. Ghanshyam Thakkar is the founder of the company who has 46 years of experience in plywood trading and 20 years of experience in laminate manufacturing business.Rushil International established for export business • 1998 . • 2007 – Reorganisation of management structure About the Promoters & Management The promoters of the firm are Mr.L. etc). They are very upbeat about the laminate and flooring business and are ready to tap the huge potential in this segment that will come as a consequence of economic boom and the concomitant increased activities in infrastructure (construction of shopping malls. Krupeshbhai G. • 2006 – production capacity reaches 4. • 2003 – Production capacity of 300000 sheets per month. • 2005 – Sridevi as a brand ambassador for Vir Laminate.P. Ltd.00. The former has nearly 20 years of experience in laminate manufacturing industry by working in areas of production. They have a highly competent and forward looking team of professionals manning different levels and functions. IT parks. multiplex.Amended 26th Nov 2007.4 • 1997 .Group’s sales graph on the upswing by export & domestic sales • 1999 . (2nd laminate manufacturing facility) established.Rushil H.000 sheets per month • 2007. • 2004 – Laxmi Pandit & Samir Khan as brand ambassadors. Ghanshyam Thakkar who possess indomitable spirit of entrepreneurship. offices. public and private utilities. Sales. environment and transport to building. energy. Production.doc/ . IMM’s strengths enable our clients to realize their projects optimally from concept to commissioning. etc. healthcare.Amended 26th Nov 2007. IMM is able to draw on world-class technical and managerial resources comprising over 5000 staff in more than 50 strategic centres world-wide.5 ↓ ↓ Finance ↓ ↓ HR Purchase Export ↓ ↓ Marketing & Project & Sales Development ↓ IT Consultant’s Background Mott MacDonald Private Limited (IMM) is a leading multi-disciplinary management and engineering consultancy based in India. investors. industrial and commercial companies. banks and financial institutions. tourism and social development.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.K. we 4 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . Purchase& Inventory. The firm boasts of Sales& Marketing Offices spread throughout the country and an extremely networked trade set up that export products to 34 countries worldwide. IT-enabled office environment that continuously monitor the work flow in vital functions such as Accounting& Finance. The Organogram is given below: Director ↓ CEO ↓ ______________________________________________________________ ↓ ↓ Account Costing ↓ Production 1. industry. As part of the global Mott MacDonald Group headquartered in U. IMM is engaged in planning and development touching many aspects of everyday life – from water.. international and bilateral funding agencies and private entrepreneurs. with offices nationwide. Across these sectors IMM works for national and local governments. developers. With 750 professionals. DMM also offers specialist expertise in assisting with public consultation. DMM takes care of every stage – site evaluation. site supervision and commissioning. takeovers. DMM also help clients such as accountancy practices. equipment inspection and testing. mergers or de-mergers. sanitation. insurance or liquidation. encompassing water supply.5. (iii) Engineering Services IMM’s range of engineering services enables clients to realise optimal implementation of projects.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. 1. sector reform and impact evaluation. 5 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .Amended 26th Nov 2007. collaborations and joint ventures.1 (i) Services Management Consultancy IMM provides business planning and project management for a wide spectrum of clients in industry. (iv) Infrastructure One of the key strengths of IMM lies in large-scale integrated urban infrastructure development. procurement. solid waste. take care of the entire process – including providing advice on the best procurement route and the optimum approach for maintaining the project once it enters service. Here our services range from planning and advisory assistance to detailed engineering and construction management. project management. (ii) Social Solutions IMM has undertaken numerous studies and advisory roles for leading development banks and funding agencies. financial institutions and industrial companies in making a realistic appraisal of their fixed assets. and in preparing for disinvestment.doc/ . basic and detailed engineering. drainage. infrastructure and social development. and community buildings. Projects range from implementing vital AIDS eradication programmes and pro-poor initiatives to studies for institutional strengthening. including international development banks and funding agencies. contract preparation. acquisitions. roads. availability of raw material. 1. drivers that could spur the 6 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . etc. • Technology Evaluation.supply scenario prevailing globally and locally for MDF.doc/ . economic and financial feasibility. pharmaceuticals and biotechnology. • Plant location analysis. 1. Market study will broadly cover the demand. telecommunications and security. operating cost and revenue estimates. its competing products (substitutes).Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. structural. along with planning and project management expertise. as well as bulk drugs. notably building management systems. • Sensitivity analysis to identify factors crucial for the commercial viability of the project. (vi) Buildings IMM’s business covers all sectors from commercial and leisure to industry. technology. location aspects. oil and gas. DMM is known particularly for its expertise in process engineering and licensing for speciality chemical production based on laboratory/pilot plant know-how developed by R&D centres. DMM provides the full range of architectural. • Market assessment to justify project rationale from the market point of view. textiles. agri& food processing and life sciences. • Working out detailed financial analysis as desired by the financial institutions. mechanical and electrical design skills.6 The Scope of Work The scope of work (SOW) includes• Assessment of raw material availability to ensure sustained operation of the plant.Amended 26th Nov 2007. vertical transportation. Building services are a special capability.7 Approach and Methodology The entire work (study) will be broken down into individual sets of mutually-exclusive and collectively-exhaustible issues addressing market demand. end use pattern. education and healthcare. (v) Industry IMM’s skills and experience have earned it a leading reputation – especially in chemicals. • Assessment of project cost. Technology will cover the brief description of the process along with features such as contemporariness of technology. ailanthus and celsa) and the steps to ensure hassle-free availability of the same will also be discussed. Also contingency plans for alternative raw material (say. price elasticity. proximity to market. This will throw light into the competitive landscape. etc. The marketing strategy will look into the existing sales and marketing set up. labour. transportation. the sourcing of the same and related logistic issues will be covered in the next section. and addressing the issues holistically that goes beyond 4P’s.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. threats and opportunities. domestic and international prices and trends thereof. energy efficiency of the process. 7 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . past imports and exports from India. etc. etc. destinations and prices etc. We would utilise our data bank and also refer to authentic and published materials/literature etc for the purpose of collecting information on industry structure. IRR and debt service coverage ratio. etc. etc. availability of power.doc/ . ease of operation. local availability of plant and machinery. the forces that act within and outside. elaboration on certain strategic issues pertaining to the business will be provided. The availability and suitability of raw material (cotton stalk) for the production of MDF. water. storage.Amended 26th Nov 2007. demand. scalability and flexibility in technology/ operation. Also specific strategies will be recommended to tide over the challenges and surge ahead successfully. and a host of other relevant issues like land. The detailed revenue modelling will cover the means of finance. calculation of projected cash flows and the estimation of NPV. Location Study will look into issues such as raw material availability. international demand-supply scenario. need for reconfiguration if any. optimal debt-equity structure. The endeavour is to source the best available option in terms of reliability and superiority of technology / plant and machinery. modularity. revenue streams. In addition. Energy Efficiency Flexible Line of Operation Source: MM Analysis 8 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . etc. Figure 1. Power.1: Approach and Methodology Market Study Marketing Strategy Demand vs.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Balance Sheet& Income Summary NPV. DSCR. Supply Existing Setup Growth Drivers Distribution Channel Substitutes 4P’s and Beyond End Uses Raw Material Assessment Revenue Models Major Raw Material Procurement Means of Finance& Capital Structure Contingency Options Revenue Streams& Cash Flow Other Issues Proj.Amended 26th Nov 2007. Site Selection Proximity to RM/Market Availability of Water. etc Logistics& Distribution Issues Technological Aspects Track Record Strategic Insights Ease of Operation 5-Force Analysis Scalability/Modularity Competitive Strategy. IRR.doc/ . Amended 26th Nov 2007. Also a lot of these activities are not properly recorded. 9 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . A judicious mix of desk research. it is very difficult to capture the exact under currents in the market.8 Caveats Since MDF market is a bit unorganised.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. interviewing of key personnel in the MDF/ related business and using some clever conjectures based on our own experience was the method adopted to address this issue. 1.doc/ . This poses a lot of challenges for the consultant and the client alike. filed visits. 2. MDF is available in two grades.5 to 0.88.1 Features of MDF MDF is resistant to warping and compression.doc/ . interior grade and exterior grade and are available in thicknesses ranging from 4mm to 50mm. MDF has a good capacity to hold screws and nails on surfaces and edges.1. 2 Product Description 2.Amended 26th Nov 2007. It has excellent screw-holding ability and edge-finishing characteristics. It can easily be edge-machined to into many different profiles ready for subsequent direct finishing due to its relatively uniform thickness density profile.1: Classification of Board based on Density Fibreboard Typical Density Range (Kg/m3) LDF (Low Density Fibreboard) 160-450 MDF (Medium Density Fibreboard) 500-800 HDF (High Density Fibreboard) 800& above MDF is a panel product manufactured from lignocellulosic fibres combined with a synthetic resin or other binders.1 Medium Density Fibreboard Fibreboards are classified into low density. medium density and high density fibreboards according to the density profile as shown below: Table 2. namely.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. MDF has a homogeneous structure with no identifiable grain or no variations in surface hardness.The IS specifications are reproduced below: 10 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . The specific gravity varies from 0. Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Table 2.2: IS Specification of MDF Board Sr. Specifications No. 1 Water Absorption a) After 2 hours soaking b) After 24 hours soaking Unit Interior Grade % Exterior Grade 9 6 18 12 500-900 500-900 5.15 5.15 Thickness 7 4 Length 0.4 0.3 Width 0.4 0.3 28 28 25 25 Upto 20mm 0.7 0.8 >20mm 0.6 0.7 Face 1500 1500 Edge 1250 1250 3 2 Density Kg/m 3 Moisture Content 4 Linear Expansion % (24 hours soaking) a) 5 General Absorption % N/mm2 Modulus of Rupture Upto 20mm >20mm 6 7 Tensile Strength Screw N/mm Withdrawal 2 N Strength 8 Dimensional Tolerance Mm Length ±3 Width ±3 Thickness ±0.3 MDF offers better quality than particle board. It has lower tendency compared to particle board for “fibre pop” which comes from larger particles in the surface that swell more than adjacent particles. Fibre pop occurs when the board is exposed to high humidity. MDF has better strength and stability than veneered particle board. The internal bond strength of MDF is about 50% higher than the corresponding value for veneered particle 11 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report - Amended 26th Nov 2007.doc/ Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. board. MDF with a highly homogeneous construction and uniform density gradient does not require a veneer overlay. The distinct advantages of MDF are outlined below: 2.1.2 a) It does not delaminate b) Excellent moulding abilities c) It can be joined, riveted, tongued and grooved. d) It can be calibrated and sanded on both sides. e) Lathe work can be done easily. f) It is free from overlays and gaps. g) It possesses homogeneous strength. h) It is free from knots and cracks. i) Humidity-resistant. j) It has low formaldehyde content. k) Very good screw-holding and edge-finishing properties. l) It needs no special tools or work methods. m) All kinds of paints, lacquers, stains and varnishes can be used on MDF. n) It is insect-resistant. Applications MDF is being used in residential, commercial buildings for partitions, panelling, false ceilings and furniture. Thin MDF has applications in beds, cabinets, chairs, panelling, drawer bottoms and centre panels in framed doors. It can also be used as skins for flush doors, partitioning, office screens, lightweight doors and exhibition paneling. Novel application avenues are in shoe making, motor vehicle interior parts, toys, printed circuit board production and blades for electric fans. Due to its excellent acoustic properties, MDF is also being successfully used in Hi-Fi equipment. Moisture-resistant varieties are being developed that can be used for exterior applications. 12 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report - Amended 26th Nov 2007.doc/ Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Thick MDF boards can be used in buildings as columns and archways in place of solid wood where the warp resistance, torsional stability, screw holding strength and edge finishing characteristics are important. Thick MDF can be as a core substrate material for paneling with veneers, printed surfaces, vinyl and low pressure laminates due to its dimensional stability and smoothness. Thick MDF is also widely used as a base material for laminated and veneered wood products for flooring and wall paneling and for foil wrapped mouldings. It can also be used for a wide range of furniture such as tables, cabinets, windows, doors, frames, handicraft items, display or exhibition stands and signs, ceiling, toys, carving, partitions, maritime applications and educational equipment. The entire versatility of MDF is yet to be utilised in a host of applications. In short, the product has the potential to replace plastic, metals and wood in a wide variety of applications which is only limited by our imagination. 2.2 Prelam MDF Board To improve the aesthetic look and applicability, laminate paper is applied or fixed on the fibre board with the help of a press. This board is known as “pre laminated board” or “prelam board”. The prelam board has more than one paper on its surface like base paper or balancing paper, decorative paper and other protective film. These papers help to improve resistance to abrasion, temperature and water. As the prelam board is an improved version of the MDF board, the specification of the Prelam board is completely depend on the properties of the MDF board. Prelam MDF board has certain distinct advantages, which are mentioned below: • Resistance to steam and stains • High abrasion resistance • Better strength for durability • Resistance to warping and sagging • Surface counter balanced for greater stability • Strong enough for load bearing applications • Termite, fungus & borer proof • Standard screw holding capacity 13 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report - Amended 26th Nov 2007.doc/ • Panels in panel doors.doc/ . Laminate flooring can withstand the temperature variation and can be installed on any flooring like wood. Apart from these products. • Precautions Laminate Flooring Laminate flooring is composed of several layers of impregnated paper and raw fibre board. Prelam MDF board used to manufacture the products mention below: 2. particle board. High density fibre board is preferred for core board of the flooring as it has to bear the load. rubber wood. chemically treated wood. It is not 100 % water-proof and scratch-proof but by using high grade quality paper water absorption and scratch ability can be minimized to a great extent. • Beaded doors.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. • Computer furniture.Amended 26th Nov 2007. 14 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . • Partitions. hardboard. particle board and plastic panels in a variety of applications. The flooring can withstand with the normal load and provide good aesthetic load. ceramic. Papers are forming the surface layer of a core layer which stabilizes the floor. etc. Flooring is available in smaller size of planks. concrete.4 Description of Substitutes MDF closely competes with other product like plywood. plantation timber. log wood and sawn wood find similar applications. vinyl. shutters & wardrobes. linoleum. 2. • Shelves • Table tops • Cabinets • Household & office furniture.3 • Cupboards. The basic properties of the laminate flooring are depend on the properties of the HDF board and laminated papers. .1: Substitutes of MDF Chosen Material Wood or Wood Base Agro Waste Base Non Wood Wood Based Panels Timber Base Panels Timber Ply Wood Block Board Reconstd Wood Panels Particles Board MDF Steel / Aluminium Source: MM analysis 15 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . Figure 2.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.doc/ Fibre Board Gypboard PVC Acrylic / Fibre glass etc.Amended 26th Nov 2007. . Steel& aluminium (furniture). panelling& lining. Plywood.Amended 26th Nov 2007. walls. Fibreboard. construction& furniture. Vehicles Particle Board Construction-flooring. Furniture Packaging-boxes. Plastics (furniture& packaging). MDF Furniture. boxes. Misc. etc. Engineeringrailway sleepers. Table 2. caravans. walls. Particle board. concrete. Furniture. Fibreboard Fibreglass.. Steel& aluminium (furniture). veneer.packaging. under floor. tea chests. furniture. steel. wharves. packaging. Sawn wood. Plywood. Vehicles-boats. piling.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. etc. Sawn Wood Construction-flooring. aluminium. particle board& sawn wood. bricks. crates. & MDFpanelling. doors. Particle board Packagingcrates. polyester overlay.doc/ .) Plywood. panelling& building elements. joinery. Fibreboard-packaging Plastics (furniture& packaging). Plastics (furniture& packaging). decorative panelling. etc. (Non-wood Types) Plastics (furniture& packaging). Concrete. & sawn wood.Toys. Paper & paperboard (packaging). mining timbers. pallets. panelling. veneer.3: Wood& Agro-based products and their application Wood Product Major Uses Substitute (Wood& Types) Plywood& Veneer Agro Substitute waste Construction-walls. veneer. walls. bridges. Paper Overlaypanelling& packaging. construction (Flooring. Source: MM Analysis 17 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . Eco friendly product Eco friendly product Prelam Prelam 13 14 & Environmental aspects Value added products to of Plywood only Does not borers attract Totally borer – proof. Comparison characteristics Plywood Particle Board 1 Insects & Borers 2 Machining. No.Amended 26th Nov 2007. carving & post forming Not Suitable Suitable to a limited extent 3 Density of the Board Medium Low Medium and high 4 Edge cutting trimming Suitable to a limited extent Suitable to a limited extent Highly suitable 5 Nail & Screw holding capacity Medium Low to Medium High 6 Board strength internal bond Medium Medium High 7 Structural strength Low due to wood layer bonding Low due to particle bonding High due bonding 8 Moulding Not possible Not possible Excellent 9 Joining & riveting Not possible Suitable to a limited extent Highly suitable 10 Surface finish Medium Low Excellent 11 Tensile strength Medium Low High 12 Raw materials 100% wood Agrowaste/wood Agrowaste/wood Dangerous forest resources country Boon for building material industry due to versatility of raw materials usage like agro waste & wood waste. Table 2.doc/ to fiber boards. Highly suitable 18 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. .4: Characteristics comparison of different products Sr. as only wood fibers are bonded together Attracts borers & wood MDF boards. Boon for building material industry due to versatility of raw materials usage like agro waste & wood waste. embossed doors.doc/ . 15 Product Specification G1 grade modular furniture modular furniture. carved surface doors.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.Amended 26th Nov 2007. painted boards G2 grade G3 grade 19 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . The total consumption also rose by 7.6 13300 1656 1758 40947.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. to 1.1 to 5.1 Market Study Global Scenario for MDF In 2005. Production in Europe rose to 13. Large scale production facilities are concentrated in Asia. the global MDF production reached about 41 million m3. MDF consumption since the past decade has well penetrated markets other than furniture industry.6 to 3. From 2004 to 2005. MDF production in the U. compared to 39 million in 2004. Europe and North America. MDF imports to North America (procurement sources: Brazil. Argentina. 3 3. 20 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . showing a growth of 7% as compared to 2004.6 million m3 in the above period.7 million m3. Chile and Venezuela and Oceania) declined by 10% in 2005. increased from 3. its consumption in most countries was more than MDF before. North American MDF production rose from 5.5 to 1.7 million m3. Table 3.3 million m3. owing to an earlier establishment of particleboard as a product.Amended 26th Nov 2007.6% to 12 million m3.doc/ . MDF production in New Zealand increased to 861000 m3 in 2005. The country also has the highest per capita consumption of the product. with 70% of the production concentrated in the United States.6 Source: Food and Agriculture Organization (FAO) stats The table explains the regional production in 2005.66 million m3).S. while the Canadian production increased from 1. followed by Europe.1: Region wise MDF production Region Asia North America Europe Oceania (Australia and New Zealand) South America Total Production (‘000 m3) 18936 5297. China has grown to become a dominant producer (14.3 million m3. But. This is expected to spread worldwide. with huge capacity inclusions in China. China Wood Continued innovations to customers’ need and to solve their problems.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. as furniture manufacturers seek cost effective methods of production. However. widely used in construction industry and furniture. owing to these reasons. MDF Board Market in the Middle East The Middle East regions comprise of developing countries like Algeria. with growing young population.Amended 26th Nov 2007.1: MDF Consumption in China Other 10% Decoration 12% Furniture 78% Source: China Academy of Forestry. and the development of Engineered Wood products lead to newer developments. which point towards growing consumption of wood based panels. Products like Sawn wood and plywood are well past their prime. Iran. The figure below highlights the MDF consumption break up by segment in China: Figure 3. Bahrain. MDF consumption rose to 16 million m3. In countries like Japan and Korea. Moreover. 21 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . particularly where MDF properties like smoothness of surface is required. these products also compete with steel and other useful materials. manufacturers are replacing particleboard.doc/ . etc. driven by furniture industry growth (2004). Egypt. compared to particleboard consumption of 4 million m3. Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. The major constraint to growth in MDF industry in the Middle East is the scarcity of raw material. Almost 70% of the total production in the region in 2005 (54000 m3) was from Iran. Trade statistics point towards the fact that majority of the consumption is met through imports. With growing demand of MDF in the region, the imports have risen from a mere 332,611 m3 in 2000 to about 2.2 million m3 in 2005. Table 3.2: Production and trade of MDF in the Middle East Year 2000 2001 2002 2003 2004 2005 Production (m3) 53000 14000 14000 14000 40300 54000 Import (m3) 279663 422631 566531 762661 1514209 2186581 Export (m3) 52 139 336 144 913 1000 Source: Dieffenbacher Report As evident from trade statistics, the export potential to Middle East region appears to be worth exploring. Future Outlook The Commonwealth Scientific and Industrial Organization (Australia) predicts global MDF demand to increase by 10% till 2010. As per Jaakko Poyry Information Service, the demand for MDF in U.S., Europe, and Asian countries (mainly China and South Korea) is expected to exceed the supply, driven by its popularity in construction industry and furniture manufacturing in recent years. The figure below shows region wise forecast of MDF surplus/deficits: 22 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report - Amended 26th Nov 2007.doc/ Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Figure 3.2: Global MDF Demand – Supply Balance Global MDF Demand-Supply Balance 2000 1500 1000 North America 500 Europe 3 (1000 m 0 ) Asia -500 1990 1995 2000 2005 2010 (F) 2015 (F) Oceania -1000 South America -1500 Africa -2000 -2500 -3000 -3500 1990 1995 2000 2005 2010 (F) 2015 (F) Years Source: Jaakko Poyry Information Service Figure 3.3: Global Particleboard Demand – Supply Balance Global Particleboard Demand-Supply Balance 2000 1000 0 1990 1995 2000 2005 2010 (F) 2015 (F) -1000 (1000 m3) North America Europe -2000 Asia -3000 Oceania -4000 South America Africa -5000 -6000 -7000 1990 1995 2000 2005 2010 (F) 2015 (F) Years As evident from the figure above, particleboard deficits are anticipated in Europe, whereas Asia, Oceania, South America are expected to have surplus capacities. 23 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report - Amended 26th Nov 2007.doc/ Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Growth Drivers: The demand of MDF is expected to show an upward trend, considering the following macroeconomic factors: 1. Rapid economic growth at the world level (GDP growth rate - 4% till 2010). 2. Population growth and urbanization. 3. Trade and foreign investment deregulation. 4. Expanding wood processing capacity. 5. Anticipated growth in construction investment, furniture and decoration industry. 6. Increasing exterior use of wood based panels in European and American countries, attributing to the suitability of climatic factors. 3.2 Laminate Flooring Market The global production of laminate flooring from year 1990 to 2005 is depicted below. Figure 3.4: World Production of Laminate Flooring 900 800 700 600 500 400 300 200 100 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2 Production in million m Source: Munksjo Paper The production of laminate flooring has steadily grown at a rate of 34.09 % CAGR in the last 15 years and has reached 815 million m2 in the year 2005. Europe is the major producer of laminate flooring in the world and is a net exporter for the last 15 years. Europe accounts for 65 % of total production of laminate flooring in the world (year 2005). 24 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report - Amended 26th Nov 2007.doc/ In terms of import. Austria. 25 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . North America is the leading continent to import the laminate flooring. Poland.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Belgium. Other leading laminate flooring manufacturing countries in Europe are France. production of laminate flooring in America has also risen in the last 10 years.5: Production of Laminate Flooring in Europe 600 500 in million m2 400 300 200 100 0 1995 1996 1997 1998 1999 Production for Europe 2000 2001 2002 2003 2004 2005 Production for Exports Source: Munksjo Paper Germany is the biggest producer of the laminate flooring and account for 28 to 33 % of world production of laminate flooring in last 5 years. The production of laminate flooring in Europe is mentioned in the figure below: Figure 3.doc/ .Amended 26th Nov 2007. With the import. and Great Britain. Switzerland. Figure 3. From 11 % of production share of total world production of laminate flooring in year 2001. 26 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .6: Market Volumes of Laminate Flooring in North America 160 140 in million m2 120 100 80 60 40 20 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Import Domestic Production Source: Munksjo Paper The production of laminate flooring in Asia is constantly rising for the last 10 years until it became net exporter in the year 2005.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.doc/ . Figure 3.Amended 26th Nov 2007. which is next to Germany only. China reached at 23 % of production share in the year 2005.7: Market Volumes of Laminate Flooring in Asia – Pacific 250 in million m2 200 150 100 50 0 1995 1996 1997 1998 Domestic Production 1999 2000 2001 2002 2003 Net Import 2004 2005 Net Export Source: Munksjo Paper The continuous increasing production of laminate flooring in China is the major reason behind the spurt in Asian production of laminate flooring. etc. hard board. The study was conducted in Ahmedabad. Bangalore. institutional buyers. (d) Industrial Buyers / Converters: This segment consists of the converters who use MDF and its substitutes for large scale manufacture of end use products. Hyderabad.Amended 26th Nov 2007.doc/ . with having fairly uniform application areas and the quantity used being substantial.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. architects & interior decorators. some actual users of MDF were also contacted. (b) Institutional Buyers: They are the large buyers of MDF and its substitutes. 3.V. The regional offices and head offices of these manufacturers were contacted during the survey.3.1 Market Survey The market study was carried out in various segments which influence the demand for MDF. Calcutta. Users of this segment have specific requirement and use 27 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . a) Competitors: They are the manufacturers of MDF and its substitutes. They may be T. Large construction companies also fit into this category. They are also the innovators in finding new application areas for various products. particle board. Jaipur and Kochi. Delhi. where the requirement is mainly of doors & windows but quantity being used is substantial. Chennai. cabinet makers. (c) Architects & Interior Decorators: This category represents the users of these products for a variety of applications. flush door and knocked down furniture makers etc. This segment do not form big market by them but help it grow.3 Indian Market 3. The substitutes are plywood. industrial buyers & converters and wholesalers & distributors were contacted during the survey. Competitors (including substitute products). For example CPWD. They were divided on the basis of similarity in response pattern and the factors affecting the demand for MDF. Additionally. These are bodies where procedures for introducing a new product are elaborate but volume of sales justifies it. easy nailing/screwing ability has given the product very good market acceptance over the years. • This industry uses premium timber log veneers as input. • Plywood possesses good strength and mechanical properties.Amended 26th Nov 2007. 3.3.) and very often influence the end users decision. they give a tough fight to organised sector plywood manufacturers. (f) End users: They are both actual buyers and users of MDF.2 Summary of Findings (i) Plywood and Block board • Plywood and Block board collectively constitute a major segment of wood panel market. • Small scale manufacturers in unorganised sector constitute the major chunk of the total plywood manufacturing. As these units do not pay any excise duty and evade other local taxes. • Construction. various substitute products according to the requirement of end product and the cost of alternative products. (e) Wholesalers / Distributors: This is the most significant segment as they form a link between manufacturing company and the actual end users.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. • Plywood is considered first choice for the household furniture in India. furniture and packaging industries are the biggest end-users of this product.doc/ . which is in short supply. They have used MDF in a particular application and were contacted to know their views on MDF. They are the members of distribution channel for various substitute products (like plywood. particle boards etc. but in foreign countries where ready made and flexible furniture demand is increased 28 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . as well as firm. 50. ability to withstand varying conditions. • Typically the Plywood is available in panel lengths of 5. which makes it non-substitutable by other wood panel products for some applications.000 M2 25200 M3 Marketing of these products is generally through the normal distribution channel of company -> wholesalers/stockists -> dealers -> consumer. thus saving plastering cost. • Plywood and Block board are available with phenol & urea formaldehyde bonding for exterior and internal application. 29 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .000 Unit M3 M2 11.000 14. • Block boards are available in a density of 750 - 900kg/m3 and thickness varies from 10 mm to 40mm.doc/ . • Prices of plywood have moved upwards at a rate of 10-15% in the last few years. • Most of the sale is on credit. 6. etc. • Plywood offers several superior properties like bending. However. • Fast moving size of Plywood and Block board is 8'x4'. The credit period varies between 30 - 60 days Source: Capital Market Manufacturer Greenply Industries (plywood/particle board) Kitply industries (plywood and boards) National Plywood Industries (plywood / block board) 4 mm basis Century ply boards (plywood) • Installed capacity 1. ceiling tiles and Plywood with very distinctive and unorthodox surface veneers. • Some plywood companies are also offering panel doors. can be bent and finish is smooth. width of 3 and 4 ft.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. sometimes the dealers purchase directly from the company. flush doors.750. there preference gradually moves to other available alternate products.18.350.Amended 26th Nov 2007. This can be primarily attributed to increased prices of raw materials.. termite resistance. 7 & 8 ft. in last decade. and thickness of 4. 6. • Plywood shuttering is preferred over wooden or steel shuttering because it is lighter to handle. 9 and 16 mm. • Novopan is the market leader of particle board followed by Bhutan Board.Amended 26th Nov 2007. • Particle boards are mainly used for partition/panelling and in the manufacture of doors (as inserts in frame) and rarely used for table tops. • Nepal Boards. Bhutan and Sri Lanka. Mysore Chip Boards. poor tensile strength and poor screw/nail holding strength. 12 mm thickness particle board is used as inserts in door frames. • A substantial portion of particle board (around 65%) being marketed is laminated and the remaining 35% are in the form of plain& veneer boards. Vision Boards. It markets around 50% of its production in India. Particle Board • The market size for PB in India is roughly US$110 million. Almost 90% of the demand is met by domestic production and the rest is imported.55 lakh tons per annum. Decoboard (Bakelite 30 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . Wood accounts for 87% of the raw material used in the manufacture of PB. Aurobindo Laminates and Trimurti used to manufacture particle board using bagasse as raw material. rice husk. 9' x 4' & 10' x 4' and the thickness ranging from 9 mm to 35 mm. 18mm for modular furniture.doc/ . Imports are chiefly from Nepal. Novopan has two manufacturing units with capacities of 50.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. • PB suffers from the poor edge machinability. wood chips.000 cubic m/year respectively. • Ecoboard. etc. Uro. such as bagasse. • Standard sizes of particle board panels are 8' x 4'. • At present there are 15-16 players of particle board and the demand for the same is nearly 2. Ready made furniture manufacturer prefer particle board as main raw material. Bhutan Boards.000 and 75. • Industry uses a variety of raw material for the manufacture of particle board. • Bhutan Board unit in Bhutan with an installed capacity of 21000 TPA has been performing at 70% capacity utilisation. The unit is located in Bhutan. with a year-on-year growth rate of 20%. The other sizes commonly used are 15 and 25 mm sheets. • MDF initially was not accepted positively by traditional carpenter because of slightly different work practices requirement. and Nuchem Ltd. • Majority of sale is of 8 ft x 4 ft. The trade name of Mangalam's product is "DURA TUFF" and that of Nuchem Ltd. These are Mangalam Timber Products Ltd. 31 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . but in foreign countries where ready made and flexible furniture demand is increased in last decade. is "NUWUD". Hylam) and Novopan manufactures PB from wood. is 60000 cubic m/year (45. Medium Density Fibre (MDF) Board • MDF worth US$ 67.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. branded as Greenlam™. there preference gradually moves to other available alternate products. whereas the plain boards are dominant in Northern India. • There are two manufacturers of MDF in India.5 million are being imported to India every year that meets almost 75-80% of the total domestic demand. • Pre-laminated boards of DURATUFF are preferred in the Southern and Western regions.a. one of the major players in plywood. Although Greenply not manufacturing MDF board at present. • The plant capacity of Mangalam Timber is 57000 cubic m/year and that of Nuchem Ltd. • Plywood is considered first choice for the household furniture in India. 12 and 18 mm. • Greenply.000 MTPA). at present the carpenters find it easy to work with MDF.doc/ . Based on market information. However.Amended 26th Nov 2007. the market for MDF is growing at an impressive rate of 20-25% p. particle board and decorative veneer board manufacturer. • Duratuff™ is available in interior and exterior grade and also in pre-laminated form whereas NUWUD does not have pre laminated boards. is also entering in MDF market with pre laminated boards. it purchases MDF from outside and get it laminated in its unit. panels and thickness prefer-red are 6. MDF market in the Eastern region is negligible because of the easier & cheaper availability of non-teak wood. CPWD. Taj Group of Hotel.8%. DDA. but gradually this preference is shifting towards ready made and flexible furniture. Mumbai. Chennai. BPO. • Poor awareness about MDF board has been a deterrent. HVDCO. Ministry of External Affairs. is expected to witness a robust growth in the wade of upswing of purchasing power of more than 400 million middle class populations. ITC Ltd. • MDF manufacturers are trying to push the product directly to the institutional buyers who are the large consumers. • The growth in furniture consumption has been attributed mainly to unprecedented growth witnessed in construction and residential real estate markets.Amended 26th Nov 2007. BPL & Philips. • With the rising income of middle class and willingness to change furniture often. • MDF is also being sold to original equipment manufacturers like Videocon. Company plays a promotional role only. Hyderabad. which is made up of MDF board.000 crores. 32 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . State PWDs.. They use Phenol Formaldehyde resins for making exterior grade MDF.doc/ . Kanpur and Jaipur. retail and banking. IAAI. New Delhi.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Corporate sector prefers MDF because it provides good aesthetic look and fast erection of furniture in office. etc. • The major demand of MDF board in recent years created by the new emerged industries in India like software. • MDF has been accepted by institutions like IOC. The furniture industry. Pune. The short term growth is anticipated at 7% . Bangalore. These companies use MDF in the manufacture of speaker cabinets. Surat. but this can overcome by educating carpenters and the end user. Ahmedabad. will also perk up the demand for MDF board. Manufacturers of MDF claimed that they are making exterior grade conforming to international MDF specifications. • Plywood is considered first choice for the household furniture in India. State Housing Boards. valued at almost INR 30. • Much of the domestic demand for furniture (65%) is from ten major cities viz. mouldings. windows. • Sintex. • Because of excellent water resistance properties these panels surpass all the other similar products in performance. polishing. • However. most people related to MDF expect it to perform better in panels and doors compared to furniture. 33 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . doors.Amended 26th Nov 2007. Cement Bonded Particle Boards. but over a period they fade due to environmental effects. • Manufacturers are quite optimistic about increase in share of MDF in the total panel product markets and particularly plywood. they expect it to perform same function of timber in the manufacture of doors. the largest manufacturer of PVC panels.) • The plastic panels are made of PVC which is relatively costlier vis-à-vis the other panel products. not suitable for use in external uses like doors & windows. They expect a penetration level of over 30% of total panel product market in the future. • The plastic panels are not very strong. • Nuchem has a variety of downstream products of MDF like doors. • Gujarat Synthwood claims to be making a scratch resistant product with integral skin and appearance similar to wood. These products need no painting. etc.doc/ . are focussing on direct marketing to the end-users. etc. thus. windows and partitions in commercial buildings. where majority of MDF is being used in furniture making only. Thus.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Marketing through architects was not very successful because of their high price. varnishing etc. • These panels look very attractive. because they are pre-finished on both the surfaces. This is in contradiction with the international trend. • Uses of plastic panels are limited to door & window frames. the acceptance level is low. These downstream products are manufactured by Nuchem on contractual basis. Others (Plastic Panels. Moreover. • Laminate floors are made up of a thin. 34 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .doc/ . The market for these is slowly developing. Laminated Flooring • Laminated flooring is widely used in household. Caprihans & Fixopan Industries. • The manufacturing companies have focussed on institutional markets where volume is high and product requirement is standardised. corporate offices. • Cement bonded particle boards are mainly used for flooring. • Doors of PVC panels do not find easy acceptance because of psychological preference for wooden door. Customer accepts frames and windows of material other than timber more readily but customers still prefer wood or something similar in appearance and texture. transparent upper crust that is resistant to wear and tear. Uniplas. Laminate floor cheaper than the real and hard wooden floor. Cement bonded particleboard at present is manufactured by NCL Industries (Bison Panel) in India. kota and ceramics are the most preferred flooring for house flooring market in India. Wooden flooring also getting acceptance slowly in Indian houses because of the availability of the laminated wooden flooring. • Gujarat Synthwood is trying to promote the product in household and residential applications to expand the market. and entertainment complexes. But still granite. and of high density fibre board inside. hotels.Amended 26th Nov 2007. marble. ceilings and partitions. Laminate floors available at Rs 200-300 per sq feet. Because of its high price & preference for wood or something similar to wood for doors and windows the penetration of PVC panels in the total panel product market is quite low. restaurant. • The major manufacturers of PVC panels are Sintex.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Jain Group manufactures polystyrene (trade name "TIMBRON") 'based panel products. • These products are also relatively new and are still trying to carve out a market niche for themselves. Gujarat Synthwood. etc. • Laminated floor provides good aesthetic look. 3. • Laminate floor are less vulnerable than pure wooden flooring from water and dust. which depends on the paper used in the surface of the wooden floor. They 35 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . demand of the wooden flooring in India is 90 % met by import only.Amended 26th Nov 2007. • Laminated floor can be installed on existing flooring of wood. It makes floor cleaning easy.doc/ . • The surface layer of laminate flooring is hard. ceramic. vinyl.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.3 Institutional Buyers for MDF A SHIPPING INDUSTRY MDF / Particle board can be used in the manufacture of furniture in ships for which at present plywood is used. marble and now its laminates flooring. Currently marine plywood is used in this application. • More than 20 brands are selling in the Indian market presently. so dirt and dust do not adhere to it easily. laminated flooring is available in market with the warranty up to 50 years. Amongst the well-known brands.3. linoleum. almost all laminate floors are glue-free today. people have moved to granite. compact and autistatic. B. It is available in different colours and designs. • At present. RAILWAYS Research Design & Standards Organization (RDSO) is the research wing of Railways. A large number of these are importers. but they also require great care to maintain sustainable life. Eggar. etc. particle board. • The Indian flooring market has witnessed a lot of changes in the last 50 years. there are Pergo (a Swedish brand). • Technology has change laminate flooring from glue joints to mechanical click joints. Due to improvement in technology. Floormaster. Krono (a German brand). ceramic. From the traditional stone flooring. concrete. However. (ii) Some bus/truck body manufacturers said that they do not know anything about MDF and nobody has approached them for such a product.Amended 26th Nov 2007. New Delhi for joinery and various interior 36 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . promote the use of newer materials in coach building. At present MDF is not used in such building. For experimentation/trial purpose they have used it in some of the construction and are observing its performance. Their Technology Application & Development Cell (TADC) has approved the material and they are still conducting some tests on the product. But the results of this experiment were not satisfactory. (iii) They find that exterior grade MDF is not easily available in the market (iv) Housing & Urban Development Corporation (HUDCO) another central government body in housing is also giving MDF a trial by using it in some of the construction activity. Kapurthala opined that approval of RDSO is needed for using any new material. STATE AGENCIES (i) Central Public Works Department (CPWD) is quite favourable to the product. New class of material is tested and certified by them. They would also prefer a pigmented exterior grade for easier identification. This is communicated to all the nine zones of Railways so that field staff can use them.doc/ . the trials are still on. (ii) Main use for CPWD is in door shutters followed by windows and frames. SURFACE TRANSPORT (i) Presently wood.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. c. HUDCO has used MDF in its Type IV flats at Khelgaon Marg. (iii) Gujarat State Road Transport Corporation tried MDF for passenger seats by replacing plywood which was being used earlier. Perambur and Railway Coach Factory (RCF). But the Department is quite stringent on the Boiling Water Proof (BWP) grade product. D. plywood and block board are being used in bus and truck body building. The two major coach factories namely Integral Coach Factory (ICF). For frames. But carpenters or workmen need to be educated about the product for better penetration. performance and awareness about the product will influence the choice of customer and the penetration is expected to increase in the future to over 30 to 35% of the panel product market.doc/ .3. (vii) Availability of larger sizes of MDF like 8'x6' (which is available in particle board) is desired by some interior decorators. MDF is not preferred because of its poor adhesive properties compared to plywood and blockboard. steel or aluminium is used and in windows steel. aluminium and PVC are preferred. Points (ii) & (iii) are not weaknesses per se.4 Architects & Interior Decorators (i) Positive attitude about the product is reflected by various architects & interior decorators contacted.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. (iii) Modular furniture is a new concept. (iv) Short supply of MDF especially NUWUD has also been reported by few. It will be preferred by the people who want economical stuff but for the class which believes in exclusiveness it is a preferred material. RDPL can look forward to leveraging the advantages arising out of domestic production at economies of scale. but opportunities. However. (iii) Users have found availability of MDF as a constraint. 37 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . PRIVATE BUILDERS (i) Private Builders see a great possibility of MDF application in door shutters. (viii) Everybody agrees that price. in the cases where polishing arid teak ply lamination is required. Higher use of MDF and other panel products is reported in the western and southern India.Amended 26th Nov 2007. (vi) According to majority of respondents in this category. E. (v) MDF is preferred because of its appearance. (ii) MDF is recommended in the furniture which is painted for use. Door shutters traditionally have been of wood and they would continue to be made up of similar material. (ii) Price-wise MDF is either on a bit higher side or equivalent to other material in their assessment. 3. MDF is a success abroad and in India direct marketing and promotion through architects is required. price and versatility. The contribution of the sector to the GDP is approximately 0. Also acoustic properties of particle board fit into the requirement.. is preferred. demand for NUWUD based furniture. (vii) MDF is being used by ancillary units of some audio/video electronic equipments manufacturing companies. requirement of moulded/carved edges can be easily met with MDF. most furniture makers have not given it a try as it. (iii) Until now furniture manufacturers have been using other panel products like plywood. 3. They make products on time bound order. Furniture (from NUWUD includes tables.5 Industrial Buyers/Converters (i) Respondents of this group have been using plywood and particle board till now. so cannot afford to wait.. racks with very good design creativity. in places like Muzaffarnagar. 0 Cost of MDF is less than sheesham and teak wood.Amended 26th Nov 2007. particle board being a cheaper product. who have replaced particle board with MDF find this uneconomical.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. but users have minor worries about screwing properties on the edges of MDF. (v) For simpler applications like TV trolleys. the cost-benefit is not weighed in terms of MDF's durability.doc/ . Some of regular users have complained about poor availability. (ii) As the modular furniture in India is not very popular. is picking up.4 Indian Scenario on Furniture The Indian furniture industry is fragmented and 85 % of the furniture produced is by handicraft. which is forcing them to use other panel products again. The furniture production trend in India is depicted below: 38 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . However. the use of MDF is very less. Although MDF is cheaper than plywood. A few furniture makers. These are traditionally made from teak wood. is a relatively new product. (vi) In furniture making. cabinets etc.3. chairs. (iv) Handrails and margins (mouldings) made from MDF in a wide variety of designs are gaining popularity. 3.P. wardrobes. which is known for its furniture made from Sheesham wood. However. cabinets. strength etc. U. blackboard etc.5 % only. 9: Raw material used in furniture 10% 25% Wood Metal Plastic 65% Source: European Furniture Manufacturer Federation 39 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . while metal is accounted for 25% and plastic is accounted for 10 %.8: Furniture Productions in Billion Euros 2150 2130 2100 2067 2050 2000 2026 2016 1986 1950 1913 1900 1850 1800 1996 1997 1998 1999 2000 2001 Source: European Furniture Manufacturer Federation The industry grew almost 3% per annum annual growth rate in year 1996 to 1999 and then slowed down by 10 % in year 1999.Amended 26th Nov 2007.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Figure 3. Figure 3. Furniture sector recovered from the 1999 crisis and attained a 3 % growth rate in the year 2000 and 2001. The wood-based furniture ruled the Indian furniture industry with 65 % share.doc/ . The slow down was the result of the cyclical situation of the economy. 5 % each.Amended 26th Nov 2007. both from the point of view of size and of the technological innovation of the production.doc/ .Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Other furniture holds remaining 5 % share. which accounts for 65% of the production value. Import – Export The import and export of the furniture is given as exhibit below: 40 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . and kitchen and dining room’s furniture for the 7. bedroom. Figure 3. and dining room’s furniture. The second major segments in the furniture industry are corporate/office and hotel furniture with the share of 15 % each. The household furniture is the major segment of the total furniture production. bedroom 20 %.10: Furniture Production Break up 15% 29% 15% 5% 8% 20% 8% Upholstery Bedroom Furniture Dining room Furniture Other Furniture Corporate/Office Hotel/contract Kitchen Furniture Source: European Furniture Manufacturer Federation The household segment covers the upholstered furniture. kitchen. The upholstered furniture accounts for the 30 %. The office furniture segment is the one that boasts the most important companies. After US. Export of Indian furniture The United States is the biggest consumer of the Indian furniture outside India and accounts for 24% of total export of the Indian furniture.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.12: Country wise break up of export of Indian furniture 5% 24% 10% 15% 2% 14% 2% 4% 5% United States Italy others 5% Germany Denmark Belgium 14% United kingdom Canada Netherlands France Greece Source: European Furniture Manufacturer Federation 41 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . The exports are more in the form of cheap varieties at affordable costs whereas the imports cater to the elite class who wants to own the best brands available in the market. United Kingdom and Germany are the biggest export destinations for the furniture with 14% share each.Amended 26th Nov 2007. Figure 3. Figure 3.11: Import – Export of Furniture in India 160 in million Euros 140 120 100 80 60 40 20 0 1996 1997 1998 Import 1999 2000 Export Source: European Furniture Manufacturer Federation The exports of Indian furniture are ten times higher than imports of the furniture in India.doc/ . 13: Product wise break up of Indian furniture export 5% 8% 8% 42% 1% 1% 4% 31% Other Wooden Furniture Kitchen Furniture Other Metal Furniture Office Furniture Seating & Parts Bedrooms other Furniture & Parts Plastic Furniture Source: European Furniture Manufacturer Federation Import of the furniture Indian consumer prefers stylish and western furniture. Figure 3. Germany followed by the Italy with 12 % and Korea with 10 % of import share. The indicative break up of export share of the furniture products is given below: Figure 3.Amended 26th Nov 2007. The biggest import source of furniture in India is Germany which account for the 16 % of total import of the furniture.14: Country wise break up of imported furniture in India Germany 3% 20% Italy 16% 12% Korea United Kingdom United States Irish Republic 7% France Japan 9% 10% 4% 5% 7% 7% Poland others Switzerland Source: European Furniture Manufacturer Federation The indicative break up of import share of the furniture products is given below: 42 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.doc/ . plantation and imports. Rest of the demand of the wood is satisfied by the import of the wood logs.Amended 26th Nov 2007.000 Source: American Forest and Paper Association.3: Indian log production.000 Imports 3. Eucalyptus and rubber wood are the preferred trees for social forestry. The indicative break up of the round wood consumption is shown in table given below: 43 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .000 . Due to stringent government rules and environmental concern.000.000. Figure 3. 2003 Volume(m3) Logs Production . the availability of woods from the natural production is reduced in recent years considerably.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.doc/ .000 Total apparent consumption 60. The concept of social forestry and plantation is well developed in recent year and few wood panel and paper manufacturer have developed small forest to meet their own wood demand.from natural forests 14.15: Product wise break up of imported furniture in India 8% 5% 38% Seating & Parts Furniture Parts 11% Plastic Furniture Kitchen Furniture 3% Bedrooms 3% Other Wooden Furniture 3% 29% Office Furniture Other Metal Furniture Source: European Furniture Manufacturer Federation Indian wood scenario India meets its wood required by natural production. imports & apparent consumption. Table 3.from plantations & homesteads 43. Teak.000.000. 582 12. Veneered plywood) MDF/HDF Particleboard Wooden Furniture Total 2002 ($.000) 361. Table 3.000) 692.280 403.070 2003 ($.359 13.doc/ % Change 91 66 4 14 23 76 75 87 .Amended 26th Nov 2007. Table 3.45 52.7 Gap 29 24. Figure 3. 2003 Due to lack of supply of domestic natural wood.777 3. 2002 -2003 Logs Sawn Lumber Veneer Plywood (incl.587 3.70 34 Source: Ganguly.713 753.555 13.5: Indian imports of wood products.810 11.16: Break up of the round wood consumption in India 25% 12% Construction Furniture & Interior 25% Joiniry Sleepers Packaging 8% 5% Others 25% Source: European Furniture Manufacturer Federation In coming years the demand and supply gap of wood is expected to be widened.716 3.736 4.462 Source: American Forest and Paper Association 44 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.740 12. import of wood base products has increase sharply in recent years.851 7.007 7.55 100.3 % of demand gap 50 25.4: Demand supply gap of wood Year 2000 2010 2020 Demand 58 950 153 Supply 29 70.819 7. imports of the wooden furniture also increase by almost 75 % in year 2003. this shows the increasing trend of the wood panel based furniture in India. Indian wood panel scenario The import of the wood panel is summarized in graph given below: Figure 3.Amended 26th Nov 2007.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.17: Imports of Veneer & plywood in India (In US $ ‘000) 12000 10000 8000 6000 4000 2000 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Veneer Plywood Source: Federation of Indian Panel & Plywood Industries (FIPPI) 45 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . With the wood panel.doc/ . this may be because of the high rise in the import of the sawn lumber. Decreasing tariffs of wood imports in India has also propelled the imports of wood in India. The growth of the imports of veneer is lowest compared to other products. The sharp increase in the wood pane l is observed in 2003. doc/ . • Thrust on infrastructure projects and housing.18: Import of MDF/HDF & Particle Board in India (In US $ ’000) 14000 12000 10000 8000 6000 4000 2000 0 1994 1995 1996 1997 1998 1999 MDF/HDF 2000 2001 2002 2003 Particleboard Source: Federation of Indian Panel and Plywood Industries (FIPPI) The import of the MDF/HDF and particle board has outperformed the import of the veneer and plywood. • Government policies on forest products.Amended 26th Nov 2007. the major factors that determine the demand for MDF in the country will depend on the following: • Economic Growth Rate. • Price differential of MDF and its substitutes. The import of the MDF has shown continuous rising trend of import in recent years.5 Other Relevant Issues To put it short. 46 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . • Taxation structure of MDF and its substitutes. 3. • Product characteristics and the awareness of MDF. Figure 3. This holds promise for the domestic manufacturers in terms of making available MDF at competitive prices within India through domestic manufacturing.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. • Relative availability of MDF and its substitutes. which clearly depict the inclination of the Indian consumer towards the MDF in recent years. barks. • Development of new substitutes. major growth driver for MDF also. The National Forest Policy. smooth texture. nailing. To sum up. Within the broad parameters of the National Forest Policy. screwing and contouring). Government Policies on Forests: The world is experiencing global warming due to increased emission of carbon dioxide and ozone-depleting substances. A compact look.1 Good workability- machining operations (sawing. 1988 stipulates that the one-third of landmass should be tree covered with at least 60% in the Himalayas.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. wood wastes. the minimum level of 1 Use of a particular species of eucalyptus gave DURATUFF a dark. lops& tops. can fight those problems (through photo synthesis using the CO2) and also preserve the rich bio-diversity. There was greater resistance during the promotion phase. to a large extent. 47 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . each State should have its own forest policy statement. At the same time using non-conventional raw materials like bagasse. Product characteristics and the awareness of MDF: Product characteristics determine its suitability to a particular application. India’s Economic Growth Rate: The country has been witnessing a consistent and impressive growth rate in the range of 7-9% per annum. the government policy on forest products is the one that would promote the use of MDF and thus enhance its demand. grey colour which made the dealers and carpenters to mistake MDF for an inferior product. the quality of the machined edge thus obtained. The forests.Amended 26th Nov 2007. • Rate of Urbanisation. planing.doc/ . • Changing life styles and perception. The governments the world over has woken up to this reality to prevent de-forestation by discouraging industries that use forest resources like wood and timber. etc are encouraged. rigidity and a proper colour are the primary visual characteristics which play a major role in making or breaking the success of a product. This coupled with the increased thrust on manufacturing will have a multiplier effect on construction and infrastructure projects. for the sustainable management of its forest and wildlife resources. • Per Capita Income. However.doc/ . Price differential of MDF and its substitutes: A favourable pricing of the product vis-àvis substitutes is important to capture market share in the price-sensitive market. operator skill required and the time to complete the task are all determining factors for the acceptability of MDF. Per Capita Income: The rise in income levels and the per capita disposable income will result in the procurement of new dwelling units. Over a period of time.Amended 26th Nov 2007. acceptance at the above levels would ensure that the product acceptance trickles down rapidly to its target segment. There are only two manufacturers of MDF at present.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. 48 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . Needless to say. Relative availability of MDF and its substitutes: Nearly 75-80% of the MDF demand in India is being met by imports. namely. institutes. a) Does the product come from a branded firm (Corporate Brand Name)? b) Does it have a quality certification (BIS mark. the migrant family will start investing in house or in buying furniture. rising income levels will bring about increased economic activities. The proposed plans of Bajaj Biotec (Bajaj Hindustan Group) to set up three plants – two for MDF in eastern and central Uttar Pradesh and one for PB in western UP will result in a total production capacity of 2. In addition to the price factor. etc)? c) Has the product been endorsed by industry professionals and bodies (leading architects. etc)? As long as the product remains reasonable priced. Rate of Urbanisation: The rate of urbanisation affects the demand as follows: Migration of rural population to a urban environment seeking jobs results in greater money flow as a result of employment.10 lakh cubic metres per annum. It is ultimately the consumer who decides whether or not to accept a product. furniture and the like. the decision is strongly influenced by. builders. this can be curbed to an extent by brand-building and by running awareness programs on MDF. Mangalam Timbers (SK Birla Group) and Nu Chem. etc. etc. Another substitute called “Gypboard” (gypsum panel) is being used increasingly as walls. TV cabin. fibre glass and gypsum entering the furniture market. MDF is a preferred choice for modular furniture. 49 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .Amended 26th Nov 2007.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. cabinets. false ceiling and partition. Similarly.doc/ . Changing Life Styles and Perception: The frenetic pace of life and special constraints in the big cities would necessitate the adoption of modular furniture. woodplast is being used in garden/beach furniture. kitchen. Development of New Substitutes: The dwindling wood reserves and the increased R&D efforts in the material science to find alternatives have led to the commercialisation of acrylic. we may discuss issues pertaining to India and Gujarat in particular. as the raw material for MDF Board manufacturing. 4 4. the cotton cultivated area in India is nearly 9 million hectares (year 2005) with an average yield of 450 Kg/ha. But due to dwindling forests and the stringent government regulations to protect forests.Amended 26th Nov 2007. bagasse. Since further elaboration on the subject is not relevant to our study.S.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. manufacturers are looking for alternatives to produce MDF Board. Eucalyptus. 4. United states Department of Agriculture (USDA) 50 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . Source: commodity intelligence Report.2 Cotton Production As depicted below. owing to the increased usage of BT cotton and other improved varieties.doc/ .1: Cotton Production area and yields of India and U. The yield of cotton in the US is almost double of this figure. poplar and pine are generally being used as a raw material for MDF board. RDPL (herein after referred to as client) plans to use cotton stalk/ bagasse. which is primarily an agricultural waste left after the harvesting of cotton.1 Raw Material Assessment Raw material Types Medium Density Fibre Board can be manufactured from soft wood or from agricultural wastes like cotton stalk. Figure 4. etc. But in recent years India’s cotton production yield has improved steadily.436 MT and the US 5. Indian cotton production is less than that of China and the US because of the lower yield. Figure 4. India India is the third-largest cotton producing country in the world after China and US.984. China produced 5. At present around 84 lakh hectares area is being used for cotton cultivation. while India’s cotton production in the same year was 3.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. which is expected to grow to 90 lakh hectares by year 2006-‘07. 51 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .2: India’s Cotton Production and Production area India's Cotton Production and Production area 250 200 150 100 50 0 2000-01 2001-02 2002-03 Area (Lakh hectares) 2003-04 2004-05 Production (Lakh Bales) 1 bale: 170 kilogram Source: Cotton Corporation of India Despite the largest land area in cotton cultivation.doc/ .704.665 MT of cotton in the year 2005.396 MT. India has the largest land area (Statistics of the year 2005).Amended 26th Nov 2007. Improved irrigation system and the adoption of BT cotton are the main reasons for the improvement in yield (MT/hectare).203. In terms of area of cotton production. the increased adoption of BT cotton in place of desi varieties and the improved irrigation facilities available to the cultivable land. Gujarat. Cotton production of Gujarat has steadily increased since year 2002.43 30.06 54.49 52. Gujarat’s production is higher than that of Maharashtra.66 31.26 27. Figure 4.00 11. This has happened due to higher yield of cotton in Gujarat. and Madhya Pradesh continue to plant approximately 63 percent of India's total cotton area.41 40.00 26.Amended 26th Nov 2007.75 Source: CCI In spite of lesser area for cotton cultivation than that of Maharashtra.00 2002-03 Area Production 16. Table 4. Gujarat Gujarat is the leading state of India in cotton production followed by Maharashtra and Andhra Pradesh.03 19.00 8. 52 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.50 28. owing to two major facts.3: India’s Cotton Production Yield India's Cotton Production Yield 500 400 300 200 100 0 2000-01 2001-02 2002-03 2003-04 2004-05 Yield (Kg/ ha) Source: Cotton Corporation of India The central states of Maharashtra.25 26.34 30.1: Cotton production (Area in Lakh hectare) (Production in Lakh bales) States Gujarat Maharashtra Andhra Pradesh 2004-05 Area Production 19.00 8. namely.doc/ .50 2003-04 Area Production 16.42 32. 2004 2004 .Amended 26th Nov 2007.77 lakh hectares in the year 2005 to 23.4: Gujarat’s Cotton Production Yield 500 450 400 350 300 250 200 150 100 50 0 2000 .2003 2003 .60 lakh hectares in the year 2006.2002 2002 . Figure 4. from 20.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. 53 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .doc/ .2005 Yield in Kg/Ha Source: Directorate of Agriculture The cotton production area increased by 13.5% in year 2006.2001 2001 . These are the second. Surendranagar also geographically connected with the Rajkot. The district wise cotton production in Gujarat is mention below: Table 4.doc/ . Also Patan and Mehsana have good amount of cotton cultivation.2: District wise cotton production in Gujarat (Area in ’00 hectare) (Production in ’00 bales) (Productivity in kg/hectare) Sr.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. 54 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Name of District Ahmedabad Anand Banaskantha Bharuch Dahod Dang Gandhinagar Kheda Mehsana Narmada Navsari Panchmahal Patan Sabarkantha Surat Vadodara Valsad Amreli Bhavnagar Jamnagar Junagadh Kutch Porbandar Rajkot Surendranagar Total Area 1680 13 45 1329 6 0 180 179 368 352 0 72 769 377 42 1581 0 1040 1901 320 192 402 37 1680 3845 16410 2003-2004 Production 2463 39 180 1919 17 0 506 398 804 621 0 184 774 1401 99 3164 0 3392 4116 1879 993 994 83 10118 6125 40269 Yield 249 552 680 245 415 0 478 378 371 300 0 434 171 632 401 340 0 554 368 998 879 420 381 1023 271 417 Area 1895 38 61 1297 18 0 327 206 467 435 0 104 1011 861 70 1728 0 1164 1987 467 249 547 32 2028 4071 19063 2004-2005 Production 3327 154 259 3350 73 0 1171 653 1122 1510 0 337 1101 2932 180 4499 0 2908 5159 2567 1401 1217 72 10683 9760 54435 Yield 298 689 722 439 689 0 609 539 408 590 0 551 185 579 437 541 0 425 441 934 957 378 383 896 408 494 Source: Directorate of agriculture. No.Amended 26th Nov 2007. third and fourth highest cotton cultivated district respectively in Gujarat. Surendranagar leads the pack in terms of the maximum cultivable area and production of cotton. Gujarat As shown in the above table. Bhavanagar and Ahmedabad. 2002 3442 2162 107 790 1799 387 4232 3961 159 2002 . As per the Ministry of Environment and Forests (Government of India).doc/ . which is likely to get irrigation sooner in incoming years as Sardar Sarovar project is gained fast execution in recent time. The production of cotton in Surendranagar district is mention below in table: Table 4.3: Cotton Productions in Surendranagar District (Area in ’00 hectare) (Production in ’00 bales) (Productivity in kg/hectare) Year Unirrigated Cotton Production Irrigated Cotton Production Area Area Production Yield Production Total Cotton Production Yield Area Production Yield 2000 . on an average.05 is 4.5 inches. This translates into 1.6 million bales of cotton in the same period.2004 3100 4103 225 745 2022 462 3845 6125 271 2004 . 55 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . Gandhinagar 880 3835 741 4071 9760 408 The yield of the cotton production is increased considerably in last two years in Surendranagar. Taking cues from the table (section 4.07 lakh hectares.5 tonnes per hectare of cotton stalk and the irrigated crop gives about 5 tonnes per hectare. Bhavnagar and Ahmedabad. The requirement of the plant is 100.2001 3249 1038 54 526 775 250 3775 1813 82 2001 .Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.2).2003 3234 1050 55 967 1490 262 4201 2540 103 2003 . the rain fed crop gives about 2.Amended 26th Nov 2007.3 Cotton stalk Cotton stalk’s production directly depends on the production of cotton.22 million metric tons of cotton stalks.2005 3191 5925 316 Source: Directorate of Agriculture. Generally 3 metric tons of cotton stalks is produced per hectare production of cotton. While the total Indian production of cotton in the year 2005-06 was 23. This will result in higher production of cotton stalk in Surendranagar as it has very large area for cotton cultivation. the cultivated area of cotton in Surendranagar in year 2004 .000 tons which can be met by procuring the cotton stalks from the Surendranagar area only. At present. Gujarat alone produced around 7. it is estimated that. 4. which can produce three times as much quantity of cotton stalk. Estimated weight of the cotton stalk is 300-400 gm per plant with the average diameter varying from 1 to 1. major part of cotton cultivation area is unirrigated. Also emergency provisions can be made to procure the same from the adjoining districts like Rajkot.8 million bales (1 bale equals 170 kg). Cotton stalk is mainly burned either as feed stock in small capacity boilers or as fuel in household. • Initiatives by Government to promote Textile Industry. thereby creating a “win-win” for both. Cotton stalk is not utilized so far in value added activities like the manufacturing of MDF. This would also help farmers to earn extra money from selling cotton stalks to the manufacturers of MDF. Farmers use them to make composts in order to improve the soil fertility.doc/ . The major factors that lead the rise in cotton production in Gujarat are mentioned below: 56 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . • Growing demand for apparels and clothing. it can be conjectured that a significantly large portion of cotton stalk could be made available to manufacturing MDF board. Cotton stalk is also used to prepare stock feed with the shell of the cotton seed. • Growing urbanization. 4. • Comparative as well as Competitive Edge of Indian Textile Industry. No major industrial and commercial utilization of cotton stalk is so far done in India. All these activities are done at a very low capacity and in unorganized manner. Only a small fraction of the available cotton stalk is used to prepare feed stock using the shell of cotton seed. It is envisaged that cotton production will also increase in coming years to meet the increased demand of cotton in Gujarat. The demand for cotton will increase due to growth of the textile industry.3.2 Cotton Stalk Availability Future availability of cotton stalk depends on the production of cotton.1 Cotton stalk usages The stalk of the cotton plant is processed for the development of ethanol for petrol and diesel blends and it is also used as a mulch to improve soil.Amended 26th Nov 2007.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. The major growth drivers of the textile industry in India are mentioned below: • Abolition of Quota system and MFA (Multi Fibre Agreement). increase in disposable income levels and fashion-savvy population.3. 4. Cotton is Gujarat’s one of the major revenue earning crop that supports the textile sector which is one of the leading industry sectors of Gujarat. • Established presence of Indian textiles in domestic and international market. As most of the cotton stalk is considered as waste and burnt by farmers. Cotton stalk can be used as direct fire stock in boiler and for the purpose of household. Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. 4. The successful implementation of Sardar Sarovar Project makes Narmada water available through the entire middle-Gujarat and Saurashtra for irrigation. In short. BT cotton protects the plant from blow worm. to increase the ground water level and to recharge the dry well. which in turn can help increase the production of cotton.
Adoption of BT cotton Gujarat is one of the states. before they can be used in the MDF plant: 1. Gujarat is the first state in linking rivers across the state.doc/ .3 Procurement Strategy & Design Cotton stalk available from cotton plants are required to be processed in the following stages. Due to these efforts. the cotton stalk will be largely available in future to support the MDF board manufacturing industry. This becomes the prime motivation for many farmers to move onto cotton production in the state. Removal of the ground 2. ample water will become available for irrigation to cotton crop.
Improved irrigation In past few years. Going by the current economic condition and booming textile industry. which led to the higher cotton production in Gujarat. the demand for cotton in coming years is likely to go up with concomitant increase in the cotton cultivation and hence the increased availability of cotton stalk in Gujarat. At present cotton stalk is treated as agro waste product with no seemingly major industrial and commercial applications. MDF board industry will not only utilize the cotton stalk in value addition activity but it also provides opportunity for farmers to earn extra money by selling cotton stalks. the irrigation system of Gujarat has improved due to the increased awareness of the citizens and also by the sustained effort of the Government of Gujarat. The production of the cotton boll also increases in BT cotton plant. Due to higher quality and large volume. Removal of the dirt and soil sticking to the stalk 3.Amended 26th Nov 2007. BT cotton help farmers to fetch good price for their product. Construction of check dam helps to store water for longer time. Removal of leaves and smaller branches 57 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .3. which early-adopted the BT cotton and the rise in the production of cotton crop is the result of that. The height of the BT cotton plant is normally higher than the desi (non-BT) cotton plant. No. RDPL planning to set up manufacturing unit at Dhrangadhra taluka. 4. CIRCOT is leading institute doing research on cotton and it had successfully carried out pilot project to manufacture board from cotton stalk. RDPL can develop effective technology to procure cotton stalk for long time and mechanism to lower the cost of cotton stalk by working with organisation like CIRCOT (Central Institute of Research of Cotton).5 tones / hectare 71334 55500 48750 23148 42225 74850 65100 42777 The planned capacity of the fibre board manufacturing unit is 30. Chipping of the cotton stalk 9.doc/ . if they are protected and properly stored in chipped form.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. 1 2 3 4 5 6 7 8 Taluka Lakhtar Limdi Muli Chuda Sayla Dhrangadhra Wadhvan Halvad Cotton Production (in hectare) 47556 37000 32500 15432 28150 49900 43400 28158 cotton stalk in tones @ 1. Washing of the cotton stalk 7. Its expertise and technology knowledge would help RDPL to utilise cotton stalk in efficient way.4: Cotton Production in different talukas of Surendranagar Sr. Muli. Drying of chips Cotton stalk would be available from the farms starting from the month of April to June. there would be no substantial deterioration in quality. Technically of course cotton stalk can be used for a period up to one year. Sayla. From the farms.Amended 26th Nov 2007. 58 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . and Wadhwan. which is surrounded by Lakhtar. The raw material requirement for this capacity is easily meet by the cotton production of this region. Limdi. Debarking of the cotton stalk 8. at least for another six months. if stored properly. Removal of cotton seeds sticking to the cotton stalk 6. All these talukas are cotton growing area and producing ample quantity of cotton in year. Mumbai. Chuda.000 CuM. The production of cotton in these talukas is provided in the table given below: Table 4. Removal of lint sticking to the cotton stalk 5. The location of Collection-Chipping-Storage centre is diagrammatically represented as follows: 59 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . Chotila. Patdi. Limdi Limdi.5: CCS Centre locations CCS No.Amended 26th Nov 2007. Cotton growing farmers from the surrounding villages will transport cotton stalks to this centre. Chuda Sayla. Vankaner Halvad. Halvad Each CCS centre will cover almost 20 km of area surrounding it. 6 persons required to operate weighing machine and an accountant and a supervisor. Transportation cost up to CCS centre will be borne by RDPL. Naliya. The proposed location of the CCS centre is mention in table given below: Table 4. Bechraji.24 labourers required for chipping machine operation. This would help to reduce required storage space at the factory. RDPL is planning to set up Collection-Chipping-Storage centre of cotton stalk in each of these taluka. Morbi. The collected cotton stalk will be chipped and stored at the centre and will only be transported to the factory whenever required. Each CCS centre will be established on a ‘5 Acre’ land. Chuda. the transportation cost and the overall operational burden. Dhangadhra. Muli. Around 34 persons will be stationed at each CCS centre . Chotila Muli. Vankaner Patdi. 1 2 3 4 5 6 7 CCS Centres (Proposed) Adalsar Samla Sudamda Gadhda Lakhtar Limdi Sayla Muli Charadva Dasada Navalgarh Halvad Patdi Dhangadhra Talukas Distance form Dhangadhra 38 57 48 38 27 38 0 Talukas Covered Lakhtar. Viramgam Dhangadhra. CCS centre equipped with one Mobile chipping unit to chip the cotton stalk and one weighing machine (20 tones) facilitated by software installed terminal. Wadhwan.doc/ . Halvad. while the distance of these centres from the manufacturing unit is varied from 27 to 70 km. The strategy also provides opportunity to create buffer stock to meet future demand and to control the price of raw material.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. doc/ .Amended 26th Nov 2007.5: CCS Centre Mechanism 60 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . Figure 4.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. large quantities of bagasse are either thrown away or taken away for use as fuel or for compost making. About 90 percent of bagasse produced is used as fuel. farmers would realise its value.60 million tones by the year 2015. wood etc. Most bagasse has moisture content between 45 and 55 percent by weight. Uttar Pradesh. Besides the basic purchase price of the cotton stalk. In a number of sugar manufacturing factories surplus bagasse becomes a disposal problem. the collected cotton stalks will be stored in warehouses so that the operation of the plant can be sustained for the entire year.Amended 26th Nov 2007. due to price increase in other types of domestic fuels like coal. However. Because there are chances that once the MDF unit is set up based on cotton stalks. Gujarat and Andhra Pradesh considering total sugar production and area under sugarcane. It is advisable that the client would make contract or create strong linkages with farmers and co-operatives to procure cotton stalk at reasonable prices. 575 sugar mills operating in India. (i) Pricing Our interaction with various agencies suggests that cotton stalk can be procured at a price of INR 300 per metric ton. Karnataka.0 million MT in the year 2005 and which is estimated to touch to 329. Moreover. cleaning. with an estimated production of 258. In India sugar production is undertaken practically throughout the country and there are well-established factories in 18 out of 26 States. usage of cotton stalks as a regular domestic fuel has received some serious attention. 4.doc/ . Bagasse is the matted cellulose fibre residue from sugar cane that has been processed in a sugar mill. Tamil Nadu. There are approx. who in turn.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Some projects like “White Coal” have been set up to convert waste cotton stalks into more usable configuration as fuel. handling and transportaion charges should also to be considered for the calculation of the price of cotton stalk at MDF plant. would increase the price of cotton stalks. This can be channelised either through farmer’s co-operatives or through direct buying from big farmers (RDPL is planning “collection points” at major locations). All these may put pressure on the prices of cotton stalks. Another major use of bagasse is in paper making. Average bagasse production is about 30 percent of the sugarcane crushed.4 Bagasse as Alternate Raw Material Bagasse is another option to be considered as a raw material for MDF production. India is the second largest producer of Sugar cane in world after Brazil. 61 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . The major sugar producing States in the country are Maharashtra. As this is a seasonal item. 000 MTPA of bagasse. Nearly 421 Kilo tons per annum of bagasse is available from the sugar factories of South Gujarat alone. 4. Aurangabad. Gujarat is one of the leading producers of the sugarcane. which is generally transported to the Nagpur. The average price range of the bagasse is 475 – 500 Rs. 19 factories are in South Gujarat and 3 are in Saurashtra. the selected location for MDF manufacturing facility.05 Area (in ’00 Hectare) 1777 1758 2029 1764 1967 Production (in ’00 MT) 12695 12465 14071 12669 14570 Yield (in kg/Hectare) 7142 7092 6934 7182 7407 Source: Directorate of Agriculture. Due to good road network.02 .1 Procurement of Bagasse Bagasse can be purchased either from contractor or sugar mandi and its available either in bails or loose. RDPL will require a maximum of 60.04 .Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. These factories are good source of generating bagasse. Mahi etc. Bagasse will be available in ample quantity from these factories to RDPL. The southern region of Gujarat is the biggest region of sugarcane production in Gujarat as it has good irrigation facility due to presence of larger rivers like Narmada. The survey of the sugar producing 15 factories in south Gujarat is summarized in Appendix J. Out of 22 sugar factories in Gujarat. Usually sugar factories crush sugarcane between October to April and hence bagasse is available for six months only in a year. RDPL has to transport the bagasse from the south Gujarat to Surendranagar.doc/ . Tapi.Amended 26th Nov 2007.03 . Sugar production has emerged as one of the major agro industries in the rural areas of India during the last few decades particularly in the irrigated region. Gujarat The southern region of Gujarat also caters many sugar producing factories due to good production of the sugarcane in this region. transportation can be handled efficiently and economically.4. /ton. 62 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . Table 4. Sugar production in Gujarat is substantial since many of the factories are cooperatives and the producer receives full benefit from sugar production.01 .6: Sugarcane Productions in Gujarat Year 2000 2001 2002 2003 2004 . Ideally 850 to 870 saplings can be planted per acre of land and will be ready for felling in a span of 4 years.2 Contingency Plan for Raw Material Sourcing The success of the project will depend on the availability of quality cotton stalks at economical prices. The typical yield is 100 tons per hectare. 63 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . Also it is very important to explore better ways of storing the same (as cotton stalk is available only during the harvest season) to sustain production of MDF on a continuous basis. The client has plans to grow ailanthus excelsa or other kind of soft wood tree near the factory premises in a vast expanse of land so that the wood from the same can be used as raw material for MDF. their storage and transportation.Amended 26th Nov 2007.55 tons of the tree is needed to produce 1 cubic metre of MDF. It makes immense sense to chalk out a strategy to procure or ensure the supply of raw material that can substitute cotton stalk in case there is a scarcity for the latter or if the landed price of stalk becomes unaffordable. On an average. 4.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.doc/ . 1.4. chipping of stalks. fibre mat formation and board pressing.Amended 26th Nov 2007.1 Raw material Handling Raw material consists of various types of cotton stalks (removed from the fields in the form of chips). Fibre Refining& Drying d. Raw material handling b. The distinct operations involved in the MDF manufacturing are: a.1. MDF can be processed from a variety of raw materials such as agro residues and annuals. oversized chips are separated. Forming Station f. Chips larger than the pre-determined size are recycled and very small pieces are rejected.1 Manufacturing Process of Fibre Board Three major steps involved in the manufacturing of MDF are fiberising.1. deck two. the raw material is cut into small sizes or chips. Hot Pressing g. The chips are stored in piles and transported by front loader to the chip reclaim hopper.doc/ . From.2 Chip Preparation The chip reclaim hopper will be equipped with a multiple screw conveyor system that feeds the chips for classification to the rolling screen. Board Finishing 5. Fibre Resin Blending e. These are screened and graded in sizes. In the first one. 5 Technological Aspects 5. Chip Preparation c.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. 5. The screen has three decks. the accepted material is 64 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . The mobile chippers have been chosen to be used either in the field or at the factory. After necessary cleaning and preparatory process. the fibre is discharged under steam pressure into the blow line for transportation either into the fibre drier or the start up fibre dump. Fibre and steam from the refiner are injected directly into this stream of heated air at the inlet. The reversible out feed conveyor transports the fibre either to the weigh belt conveyor or. controllable temperature.doc/ . Operating on the principle of air suspension drying. conveyed by a belt conveyor to a chip washing system. After the flash tube. which pumps the chips to the digester feed bin. with the fibre passing through a rotary valve airlock at the bottom of the cyclone to a reversible out feed belt.1. The disc type refiner will have changeable grinding plates and adjustable disc clearance to provide the degree of fiberisation required. 5.Amended 26th Nov 2007. The moisture vapor is extracted from the cyclone with the transporting air and is discharged directly to atmosphere. Chips are fed from these silos to the digester at a controlled rate. the-fibre drying steam receives the fibre and steam from the refiner blow line and dries the fibre to approximately 5% moisture content (bone dry). The steam digester operates on a controlled but adjustable steam pressure that cooks (steam condition) the chips according to the adjusted time and then gets transported to the refiner. when reversed to a fire dump. The weigh belt conveyor totalizes the fibre flow and also controls the resin and wax 65 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . the fibre and steam are separated in the cyclone.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. In the refiner. This conveyor is reversed when fire has been detected in the drier or other systems upstream of the fibre bin of the mat former.3 Refining of Fibre and Drying The digester feed bin is equipped with a vibrator feeder and controls to maintain uniform chip flow from the silos. but manual override is also provided. During normal operation. This drier is of the flash tube type and does not employ a rotating drum. From the digester-refining unit. the chips will be reduced to fibres. the fibre drier thus ensures that the fibre is maintained in suspension in a stream of heated air until the final moisture level is reached.of the flash tube drier. Large volumes of air are blown through the heater section and are heated to a predetermined. Fire detection and control of the direction of this conveyor is fully automatic. Unwanted fine material is taken out from the bottom of the screen and can be used as fuel in boilers. 5.1. 5.1. After the forming head a scalper shaves off the layer of the fibre mat. Pressing time. the boards are taken into the intermediate storage to complete the curing and equalizing of the board.doc/ .into the press.5 Forming Station Fibre is metered at a controlled rate out of the bin to the single forming head. From the weigh scale the fibre is dropped into the fibre bin of the mat former. 5. The fibre bin acts as a buffer and storage device between the fibre preparation and the forming and pressing line. pressure and temperature are automatically controlled according to a programme to be pressed with regards to the actual type of board.1. hardener and other selected chemicals are automatically blended in electronically equipped mixing units and then metered into the fibres in the blow pipe line. addition to the fibre.7 Trimming and Sanding Unloaded boards are passing a thickness control on the roller conveyor in front of the cooling wheel. From the stacker.4 Fibre Resin Blending Resin. 12 caul mats are stacked in an elevating loading rack in front of the press and then simultaneously charged . The hydraulic hot press is of frame type and heated by means of steam. The former lays a continuous fibre mat down out to a wire screen. 66 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . while the following 12 mats are charged into the press. The boards are shortly stored in the cooling wheel before they will be trimmed and cut to size.6 Hot Pressing In the hydraulic hot press 12 mats are pressed simultaneously. 5. After the pressing they are discharged into a corresponding unloading rack behind the press.1.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. After the trim saws the boards are automatically stacked.Amended 26th Nov 2007. The roll of paper is un winded & fed into impregnator. 5. Pressing cycle takes around 60 seconds for pressing one board. The prepared. cooled & stored in air-conditioned room and then send for pre lamination section to apply on MDF/particle board. Surface of the board is applied with a pressure of 30 +/. Loading conveyor and board centering conveyor adjust the board inside the machine with proper alignment of the board before pressing process.3 Manufacturing process of Laminated Flooring The manufacturing process of laminate flooring starts from the prelam manufacturing section. 5. connecting the unloading device and stalking station. brings the boards on the stalking station for natural cooling.1 Impregnation Section In impregnation line. Heat and pressure play major role in this process. impregnated paper fix on the raw MDF board. Raw board brushing machine cleans the surface before board enters into the short cycle press. with the help of press.2 Kg / cm2. Short cycle laminate press prepares pre laminated MDF/HDF boards with heat and 67 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .Amended 26th Nov 2007.5 degrees Celsius. Melamine impregnated paper is overlapped manually on to the raw board with best efforts. The paper usually weighs within a range between 80 to 140 gsm. terms also as “cooked”. where resin of required grams is applied through rollers. Roller conveyor. prelam board comes out from press with help of unloading device. 5. The heat required for pressing cycle is 180 +/. The automatic board pushing device or handling system supported with hydraulic lifting platform or scissor lift feeds raw MDF/Particle boards into the short cycle press device. the base paper and balancing paper to be used for pre-lamination of board are impregnated with MF resin.doc/ .2. The next stage is the hot pressing of paper applied raw board inside the press device.2 Short cycle Laminating Process In short cycle laminating process.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Normally the resin pickup is 100% of the weight of paper. The impregnation paper is then dried.2 Manufacturing Process of Prelam Boards: 5.2. Whole short cycle process runs through the electrical control panel that is a PLC (programmable logical control) unit. The profiled surface is then applied with PU coating layer to make the surface moisture resistant.Amended 26th Nov 2007. both crosswise and lengthwise.3. These planks are then moved for packing and storage. The dimensions of finished work pieces are 190 X 1208 mm. Core material can be MDF/HDF or particle board with laminated surface by melamine impregnated paper. pressure application on melamine impregnated papers and base board assembly. Raw material dimensions required for our process will be of W 1220 X L 2440 X T 6-10 mm. Prelam boards prepared out of this process are considered as raw material for laminate flooring manufacturing process. These planks are manually destacking and stocked for profiling process.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.3.g: cotton stalk) • Availability of man power (local availability of labour at affordable costs) 68 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .4 Location Aspects It is very important to select an appropriate location for any project and particularly for this project owing to the following factors.1 Cutting of pre laminated raw boards Pre laminated boards are fed in the cutting line with two sliding table saws for the manual crosscutting of boards in two pieces. 5. • In order to ensure continuous supply of raw materials (E. These boards are stocked for stress release before sending to manual length cutting line. Profiling operation is meant with patented/non patented click profile tooling. Cross cut boards on the sliding table saw are converted into individual planks.2 Profiling of Planks The cut panels are then manually fed into the profiling machine. 5.doc/ . Profiled planks are considered as the ready to feet flooring products. Warp of panels can be considered within a tolerance limit of 2 mm /m (max). This click profile tooling creates profile first longitudinally and then crosswise on a single DET machine. 5. This machine basically turns groove or profile over the plank edges. As project is based on the agro waste.E. The cotton stalk production quantity is higher in the region than that is required for the project. The Kandla port can act as the hub for import of the same. The distance from Valsad to the proposed site is 340 km by road and the connectivity is very good. The selected location for setting up project is Navalgarh area of Dhangadhra Taluka in Surendranagar district. The following parameters are being taken into consideration. • Hassle-free supply of water and other utilities. As the project is planned based on the use of cotton stalk as a raw material. The proposed infrastructure development plans mooted for the state of Gujarat will further improve/streamline the transportation network in the region.doc/ . 8 from Baroda to Surat (ongoing) and the extension of N. bagasse is being shipped out of the state to Maharashtra. • Uninterruptible supply of electricity at cheaper rates as the process is energyintensive.1 Raw Material Availability The raw material is very crucial part of the project. • To tap any incentives. Also the 6 laning of the N.H. This is abundantly available in south Gujarat.1 (Expressway) from Baroda till Mumbai will drastically reduce the transportation bottlenecks. improve flexibility in procuring raw material and to control the price of raw material. etc. if any. from the government that can help to improve the bottom line of the business. Connectivity to Surendranagar from the port is reasonably good.4.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. RDPL is planning to import the raw material – HDF board – for the first phase of the project. RDPL is also considering the bagasse as another option as raw material for the project. At present. 5. the location must consider the different aspects of the agricultural product used as a raw material. The selected location Navalgarh in Surendranagar district is surrounded by cotton producing areas.Amended 26th Nov 2007. 69 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . the proximity of the cotton-producing region would help to reduce the transportation cost of the raw material. Bhavnagar and Ahmedabad. N. and Rajkot by state highways. Surat and Valsad. which is well-connected with Surendranagar through state highway. 5. Kandla through state highways. 1927) region.4. Also the proximity to Ahmedabad city will help RDPL to recruit technically qualified staff. Rajkot. Re-shuffling of some staff from existing plants in order take care of the commissioning activities of the new plant is envisaged. Surat. • Water is available at depth of 650 – 700 ft and can be easily accessible through bore wells • Selected location is within Industrial Environment of DCW (Dhrangadhra Chemical Works.2 Manpower Availability Problems related to obtaining trained manpower are not anticipated as RDPL is already into manufacturing similar products and they have well-established factories functioning smoothly in Gujarat. 5. Patan.Amended 26th Nov 2007.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. • Availability of GEB power supply with 66 KVA and 220 KVA substations. Wadhwan & Halvad.4. Kandla/ Mundra ports are only 250 km away from the proposed site. • The nearest port location is Navlakhi which is at a distance of 100 kms. • Surendranagar has the highest cotton production in the state and is also surrounded by the other major cotton producing districts like Rajkot.8 connects Ahmedabad to Mumbai via Vadodara.doc/ . Surendranagar is also connected with all the major cities of the Gujarat – Ahmedabad.3 Strategic Location The project is expected to export more than 60 % of their production. • Proximity to developed towns like Dhrangadhra. Other labour staffs are also available in the region easily. 5. 70 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . The proximity of port will provide the easy accessibility to the international market.4.H.4 • Other Advantages Dhrangadhra in Surendranagar is well connected with the major cities of the state – Ahmedabad. Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. etc. • Well-established infrastructure of Dhrangadhra and Wadhwan cities • Established educational infrastructure of Wadhwan city that boasts of engineering college.5 Machinery Details All the major plant and machinery required for the production of MDF/HDF will be imported from abroad. The following techno-economic parameters have been taken into consideration while deciding the overall plant design and equipment suppliers. medical school.doc/ . management schools.1: Techno Economic parameter for machinery selection Technical Contemporariness Proven Modularity Scalability Energy Efficiency Commercial Cost Effectiveness After Sales Service Spare Parts Availability Quality Certification of products 71 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .Amended 26th Nov 2007. • Qualified manpower available from Surendranagar and nearby cities like Ahmedabad. Figure 5. Pharmacy College. 5. polytechnic. Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. The detailed list of major plant and machinery is mentioned in below with its supplier’s name. Table 5.1: List of Imported Machinery Description of Machines Supplier Name Harbin Lingzhi Mechanical & Electrical Technology Co. Ltd, PRC Sesa Press Plates,Italy Sesa Press Plates, Italy Marathon Belting U.K. Holzbearbeitngssysteme AG, Germany Longoni , Shanghai, PRC Sufoma, China (PRC) MDF + Refiner + Sanding line Texture Press plates Matt Press plates Cushion pads Flooring line Impregnation line Short Cycle Line Table 5.2: List of Indigenous Machinery Description of Machines Steam boiler-6 TPH Thermic Fluid Heater – 2500U * 3 Mobile chippers Compressor with Dryer-Oil free 195 CFM Short Cycle Line Resin Plant Tooling-diamond Supplier Name Cheema Boiler Isotex Corporation Surya energy Ingersoll-rand Master Handlers Bhagsons Leitz Other plant and Machinery Table 5.3: List of other plant and machinery Description of Machines Generator set [second hand machinery] Box packing Machinery Air conditioning Fork lifts Trucks Cooling towers RO Plant ETP EOT crane – 5 tones Laboratory Equipments Supplier Name Zodiac Genset Cabling, lighting, panel boards & fittings Electrical Chimney Weighing machines with capacity 20 tones Motors, Valves, Pipes & insulation, Exhaust, electrics & Automation Darshini Avery India Local supply Manilal Pack Plast Pvt. Ltd. Hitachi Godrej TATA Ganara Engineers Pvt. Ltd Indian Ion Exchange Enviroclean solution Pvt Ltd Safex Equipment Pvt Ltd. Gujarat test house 72 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report - Amended 26th Nov 2007.doc/ Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. RDPL has finalized foreign machinery manufacturers and suppliers for major machineries required for the plant. Brief information regarding selected machinery supplier of major machinery is mentioned below. Harbin Lingzhi Mechanical & Electrical Technology Co. Ltd, China The MDF plant with refiner and sanding line will be procured from the Harbin Lingzhi Mechanical & Electrical Technology Co. Ltd, China (hereafter referred to as Harbin). Harbin has experience of more than 12 years in supplying the wood-based and non-wood panel machinery and it is the only company in China capable of supplying the technology that is suited for MDF production from cotton stalk. In cooperation with design institutes and universities, Harbin has obtained patents for more than ten products including serial glue blender, dryer, etc. Harbin can supply machineries (for MDF production line) with capacities ranging from 15,000 to 80,000 m3/annum. The company was formed by Mr. Wang Xiaoling. Mr. XIaoling was student of Northeast Forestry University, China and worked as Director of the design department of Harbin Forestry Machine Factory from 1982 to 1994. With his immense knowledge about machineries, he compiled a book named as “Panel Machine & Equipment” published by Northeast Forestry University. He also served Harbin Xinglin Science & Technology Development Company in 1994 for one year as Vice General Manager. In 1995, Mr. Wang Xiaoling set up Harbin Lingzhi Mechanical and Electrical Technology Co. Ltd. and he holds the post of General Manager. Mr. Wang Xiaoling is engaged in the design and manufacture of panel machinery for more than 20 years. He has rich work experience and has made remarkable contribution in the field. He was an active participant in the design of press, hot press, loader & un loader, air forming and heavy-duty machinery. The company has good track record of client and had supplied more than thirty complete set of machinery of particleboard, MDF, Short cycle laminate press, moulding press line etc. in various Asian countries including Pakistan, Russia, Sri Lanka and Vietnam. Harbin had successfully carried out the joint stock system transformation with Harbin Forestry Machinery Factory, power-and-power union, and also set up the China Foma Group & Harbin Foma Machinery & Equipment Manufacturer Co., Ltd. Harbin holds Harbin Lingyu Economy & Trade Co., Ltd., which is considered as the independent import-export trade 73 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report - Amended 26th Nov 2007.doc/ Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. power. It has also stakes in Shandong Hongfu Wooden Industry and Jiangsu Xinjinjiang Wooden Industry. Holzbearbeitngssysteme AG The Homag is one of the leading engineering groups of the Germany. The group has experience of more than 45 years in consulting and software system development, engineering and installation of complex production line, and supplying technologically leading edge products in both high end and standard segment along the entire customer supply chain. RDPL is planning to procure the flooring line from Holzbearbeitngssysteme AG. Production facility of the group is present in Europe, Asia and America with worldwide sales facility and after sales service network. The homage group has supplied plants for the panel processing woodworking and furniture industry, complete plants for parquet production, complete plants for door production. Looking at the experience of the machinery supplier in the machine manufacturing, their worldwide present, and their successful track record, both the machinery supplier seems to be capable of supplying machinery of required capacity. In short, the major machineries and equipment will be procured from proven vendors who had set up similar plants in many parts of the world. The track record and contemporary designs will further ensure quality and reliability of the systems. M/s Homag has a regional office in Mumbai which will ensure a hassle-free engineering and after sales support. Master Handlers Pvt. Ltd. Master Handlers Pvt. Ltd is one of the leading manufacturers of paper Impregnation and Lamination machinery, Material handling systems and Industrial Component Cleaning solutions. The manufacturing facility, situated at Pune, has sufficient resources to perform electric engineering and programming task. The company entered in technical collaboration with Always Engineering , U.K., Stewart-Gill Conveyers, U.K. (for overhead conveyors), Tochhio (for Paper Impregnation lines), M/s Zippel (for Industrial Component Cleaning Solution) to enhance its technical capabilities in respective fields. MHPL had also set up Software 74 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report - Amended 26th Nov 2007.doc/ Bajaj. which includes TATA. Escort. In Paper impregnation line and lamination machinery. Lab press & flow press MHPL Looking at the client list for paper impregnation and lamination machinery. The client list for paper impregnation and lamination of MHPL is mentioned below: • Century • Pelit Arsian • Formica • Bloom • Greenply • Isofam • Merino • Neo-hy • Nepal board • ASD Orman • Space Wood Furnishers Pvt. Escorts etc.Amended 26th Nov 2007. 75 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .doc/ . MHPL manufacture Short cycle lamination line Paper impregnation line High pressure laminate press line Laminate furniture machines – paper foil/ veneer press . Siemens. Delphi. Company in 1991 named as Autovue Electronics and Automation Company in 1994 named as Automech Handlers. post forming machine. Hundai. Ltd. Alucon. installation and start up of production and their expertise in providing customised product and service is visible from its strong client base.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. • Samrat • Egyptial industrial flooring co. RDPL’s decision to procure short cycle press from MHPL seems appropriate. training of personnel. Honda. MHPL provides complete product technology. Kirby. . 77 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.1: SWOT Analysis Weaknesses Strengths • Proven Presence in Laminates Business • Brand Name • Robust Network of Dealers • Novice in MDF Manufacturing Threats Opportunities • Construction Boom • Proliferation of Modular Furniture • Rising Income Levels • Rapid Urbanisation • Forest Conservation • Import Substitution • Presence of Global Players& New Entrants • Dumping from Abroad • Health concerns on resins use • New substitutes Strengths • Well established presence in laminates business as well as strong brand value are anticipated to be the key factors for development of domestic as well as export market. Opportunities • Macro-economic factors like huge investments in construction sector have contributed to growth in demand of modular furniture.1 SWOT Analysis Figure 6.doc/ . 6 Strategic Analysis of the Firm 6.Amended 26th Nov 2007. the product will penetrate deep into the market. in the wake of strong network of RDPL dealers throughout the country. • Moreover. which will aid MDF in achieving an edge over competing products like plywood and particleboard.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Threats • The negative impacts of using resins on human health.doc/ . Hence. urbanization. However. • The product also faces possibility of high level of substitution. as well as probable Government regulations of shifting towards environment friendly manufacturing technology can pose a threat to the industry. Globally. a strong marketing strategy will be required by the company. steel framing. the robust network of distribution channels that RDPL boasts of will help to penetrate the market. RDPL is planning to replace UF resin with CARDENOL. • Conservation of forests due to Government policies to protect forests will increase dependency on agro waste based products as a substitution to raw material. large varieties of products (wood – plastic composites.2: Wood Products & competitors life cycles 78 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . Weaknesses • MDF industry is dominated by presence of large players in the market. OSL/Parallam) are at a developing stage and have recently been introduced in the market.Amended 26th Nov 2007. Figure 6. which is a bio resin that is environmentally-friendly. • Higher spending power of middle class population in the view of rapid growth in economy. 3: Five Force Model Competitive Rivalry MDF industry is not matured in India but it is poised for a growth as a result of increased demand for engineered woods for the construction of furniture and modular office space. The new capacity additions by these firms will be absorbed easily by the market that suggests a low intensity of rivalry.doc/ . At present. India has only two full-fledged manufacturing facilities for MDF.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.a. 6. • Dumping from abroad as well as government regulations of relaxing import duties can also affect the industry.Amended 26th Nov 2007. The rest is being met by imports. Plans are afoot by Bajaj Biotec and RDPL to set up manufacturing facilities in the near term to tap the lucrative market for MDF which is growing at 20-25% p. 79 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . which meets nearly 20% of the domestic demand.2 Five-Force Model Analysis The five competitive forces acting on the external business environment is depicted below: Figure 6. At present.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. it will be high as the consumer will have ample choices in the market to choose from. etc. the firm plans to use cotton stalks (the remnant of cotton plant after the harvest of cotton) for the production of MDF. The idea is to create win-win for the farmers as well as for the manufacturers. RDPL will engage in developing plantation so that the wood can replace the cotton stalks. The Threat of Substitutes This is profoundly HIGH as both wood based and non-wood based substitutes are easily available in the market that can be used for a variety of purposes. end use. In this respect. The Threat of New Entrants This is assumed to be “Low to Medium” due to high entry barrier and other points mentioned in the above paragraph.doc/ . Bargaining Power of Buyers The bargaining power of buyers will be Medium for branded MDF products. The success in marketing will depend a lot on the supply chain capabilities and extensive dealer networks in different parts of the country. however it is not assumed to be high or prohibitive. easy availability. This will also help in curbing the bargaining power of cotton stalk suppliers and also in mitigating any procurement problems that may arise with regard to cotton stalks. ease of use. the industry segment can assumed to be the one with HIGH entry barrier. 80 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . Also most of the critical equipments like reformer (digester) are to be imported from Germany or China. The demand for the same will boost the price for stalks. However for unbranded products. Bargaining Power of Suppliers As far as the raw material issue is concerned.Amended 26th Nov 2007. Hence the consumer’s choice will depend on factors like price. cotton stalk is burnt in the farm itself and being utilised as manure. Entry Barrier The industry per se is both capital intensive and labour intensive. Alternatively. it is [presently being sent out to the neighbouring states. As mentioned earlier in the report. Bagasse is also being thought of as an alternative raw material for the above project.Amended 26th Nov 2007. which is abundantly available in South Gujarat.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. 81 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .doc/ . Amended 26th Nov 2007. 7 Branch managers. Jharkhand.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Tamil Nadu. and Assam.1: Present Marketing Set up VP Marketing Zonal Sales Manager Project Manager Branch Manager Sales Manager Area Sales Manager Sales Executive The network comprise of about 50 sales executives. and West Bengal. 7 7. Andhra Pradesh. Bihar. Madhya Pradesh.doc/ .1 Marketing Strategy Present Marketing Set Up RDPL has well established domestic and international marketing network. Gujarat. Maharashtra. Chhatishgarh. The head office of the RDPL is situated at Ahmedabad in proximity to their manufacturing facilities. 4 Area sales managers. Karnataka. Delhi. Uttar Pradesh. The hierarchy of the of the department mention in figure given below: Figure 7. one project manager and 47 distribution partners in marketing channel. 82 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . Rajasthan. RDPL cover all the states of the India through their marketing offices established in Punjab. Bihar. Uttaranchal. who reports directly to the Vice President of Marketing.1: The present marketing zones of RDPL in India ZONE STATES CITIES Ahmedabad Rajkot Gujarat Surat Baroda Mehsana ZONE 1 Mumbai (Western India) Maharashtra Pune Nagpur Nasik ZONE 2 (Southern India) MP Indore Chhattisgarh Raipur Tamilnadu & Kerala Chennai Karnataka Bangalore Andhra Pradesh Hyderabad West Bengal ZONE 3 Jharkhand (Eastern India) Kolkata Siliguri Ranchi Jamshedpur Assam Guwahati Bihar Patna 83 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . The different zones are monitored by the zonal sales manager. West Bengal. These distributors are the sole contact point for the client and they are responsible to develop further dealers network in their region.doc/ . These states are Gujarat. Andhra Pradesh. Chhattisgarh. which is directly controlled by the client. Maharashtra. Madhya Pradesh. Uttar Pradesh. Domestic Market set up: RDPL has appointed direct distributors in many states. Delhi and Tamilnadu. Karnataka. Kerala. The exclusive office is also operated in Mumbai in name of the client. On an average every state has 2 to 3 distributors appointed. The zone structure is mentioned in the table given below: Table 7. Assam. The total Indian market is clearly divided between different zones. which are major markets of wood base panel in India.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.Amended 26th Nov 2007. Jharkhand. Rajasthan. Punjab. Australia. the cost-competitiveness and the established brand equity will play a vital role.A. 84 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . ZONE STATES Rajasthan ZONE 4 (Northern India) CITIES Jaipur Udaipur Delhi Delhi Chandigarh Chandigarh Ludhiana Punjab Bhatinda Uttaranchal Uttar Pradesh Dehradun Lucknow Agra Source: RDPL International Market: The long-term relationship. Far East countries.2: The present marketing network of RDPL in world Region of world Country of market presence Hong Kong China Malaysia Phillipines Far East Singapore Taiwan Thailand Qatar Middle East S. RDPL is envisaged to export nearly 60% of the product to favourable market destinations around the globe. Europe.Amended 26th Nov 2007. the client enjoys with many dealers around the globe. The international marketing network of the RDPL spread in 34 countries including Canada. In this respect. Venezuela.Arabia Kuwait U.doc/ Gulf . especially in Europe can be leveraged further to export the products from India. USA.E.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Table 7. and countries with the strong brand name “Rushil Décor premium laminate”. 7. promotion. what is MDF? What is the ideal set of applications? And its advantages vis-à-vis plywood. etc. The specific choice will hinge upon an optimum combination of the following aspects such as price discounts. veneer and similar substitutes. The former is based on differentiation. product innovation.2 Formulation of Marketing Strategy MDF as a product has more than 15 years of presence in Indian market. veneer.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Region of world Country of market presence Yemen Bahrain Jordan Egypt Israel Mexico North America U. particle boards.S. improved services.2.A. etc. etc. product proliferation.1 Product Pricing It can adopt two different ways. Hence the obvious questions that the firm should address are. offering high quality MDF compared to that of the market leaders at a price commanding premium.Amended 26th Nov 2007. There are only two players who manufacture MDF domestically. which is. Also the lower cost of production on account of utilising the cheaply available cotton stalk as the feedstock will help the firm to position its range of products competitively in the market. adopting a high-value strategy based on slightly lower price than the competitor is more likely to succeed. Venezuela Peru South America Columbia Australia Australia Source: RDPL 7.doc/ . which is a potential substitute/supplement for plywood. 85 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . However looking at the market dynamics prevailing in this segment. the major chunk (whopping 80-85%) is being imported. cost reduction. doc/ . the finished product (MDF) can even match the EN standards. gift vouchers. • Obtain certifications from leading architects. finish. But these are mainly concentrated in the urban cities. Trial reports and trial samples are available with the company and as per the report. Trials had been conducted in India and in Germany to produce MDF from cotton stalks and the quality of fibres were found to be very good. it is worth while to try smaller towns and townships with a critical mass. The typical thickness of MDF ranges from 3 to 35 mm (6. 86 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . furniture makers.2. Export options are also being thought of by RDPL as a riskminimisation strategy (natural hedge against business cycles).2. • Special incentives for bulk orders in the form of extended warranty.5 Product Promotion An important component in the famous 4Ps.4 Distribution Network RDPL has a significant presence in the laminate business in India with offices and sales centres spread across the country. 7. by adding 20% of wood. etc. The surface finish could be of plain. However the bulk of revenue will come from metros and tier1 cities.3 Product Proliferation The thrust is to offer large number of options to the buyer in terms of plate thickness.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. etc.2 Product Innovation RDPL is the first of its kind in India and the first company to manufacture MDF from cotton stalks. The embossed panel could be used directly for up market doors and partitions.Amended 26th Nov 2007. etc. With the income levels in suburbs and semi-urban places going up. 7.2. It can be extended to MDF also. RDPL already imports high quality paper laminates to make prelam. • Obtain ISI mark and other quality certification. 12 and 18mm being more popular in India). 7. etc. 7. laminated versions. grit or embossed. the promotion will entail the following things.2. • Endorsement by professionals and celebrities. 7. All these products have the highest market demand in panel board market.Amended 26th Nov 2007.2. which will help them to move up the value chain and cater directly to end-product consumers.2. insects& termites. life cycle. company performance.7 Product Mix Plant and machinery being procured by RDPL is capable to produce the MDF board with the varied thickness of 6 mm to 18 mm. Product attributes like resistance to moisture. and 18mm. 87 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .doc/ . 16mm. This provides flexibility to manufacture the product as per the demand in market. At present RDPL planning to manufacture the HDF laminated flooring and Prelam MDF board with the thickness of 12mm. international trends. without converting it into prelam and laminated flooring. machinability. RDPL can also sell MDF and HDF boards directly. The strategy should be evolving based on these market pulses. industry status. in a market that depend upon the several conditions. etc. etc should be highlighted to entice customers.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. 7.6 Business Intelligence The company’s market research team should be geared to continuously monitor customer preferences. RDPL can also enter in modular furniture manufacturing in future. Amended 26th Nov 2007. 8 Financial Modelling & Analysis 8.1.50 Lakh. As per the condition of the land. client has estimated land development cost is Rs.2 Building and Civil Construction The Estimated break up of building and civil construction is provided in table given below: Table 8. o Cost information available with IMMs’ database Land and Land development RDPL has purchased 67 acre land worth of Rs.1 Estimation of Capital Cost The estimation of capital investments have been made based on information collected from the following sources – • Plant and Machineries as per the data provided by the client • Cost of Indigenous component of the project has been worked out on the basis of : 8. Ltd.1 o Cross-checking the cost with cost considered in similar projects o Data obtained from Rushil Decore Pvt. No. 1 2 3 4 5 6 7 8 9 11 12 13 14 15 16 17 Particular Guard Room (3*3) Scale Station Canteen Room (8*23) Shed bicycle (6*30) Office (3*27*10) Electrical Station (10*26) Product Store (15*126) Production area (30*126) Refiner Line (3*10*15) Wood Yard (95*151) Fuel Station (20*10) Boiler Room (18*30) General Storage (18*48) Pool Water Tower Waste Water Treatment Quantity 9 184 180 810 260 1890 3780 450 14345 200 540 864 300 50 200 88 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . 85 Lakh at Navalgarh in Dhangadra taluka of Surendranagar district.1: Building and Civil Work Sr. 8.doc/ Unit M2 M2 M2 M3 M2 M2 M2 M3 M2 M2 M2 M2 M3 M3 M3 .Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.1. China Supply Nantong New Century.68 133.00 0.37 0.00 252.56 116.37 13.39 0.08 140. Client has finalised supplier of all the major machinery required for the project.56 116.00 0.08 140. 450 Lakh as per the architect’s estimation.15 20. V-Hold.52 13.00 0.72 Final Cost 46. 8.95 0.84 81. The detail of the machinery is provided in table given below: Table 8.doc/ .37 11.57 1.93 81.3 Plant and machinery cost Imported RDPL is importing critical machineries for the project.59 0.3: List of Indigenous machinery (Rs.21 13. phase 1 phase 2 Total 947.00 76. Italy Marathon Belting U.Amended 26th Nov 2007.41 1295.57 1. The cost of building and civil works require for the proposed project is Rs.00 72.95 123.37 11.00 123.00 266.41 1028.82 286.27 133.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.21 0.Italy Sesa Press Plates. Kunming Sesa Press Plates.52 947.00 0. Sanghai Yalk Ltd.00 13.95 phase 1 phase 2 89 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .76 Indigenous The list of Indigenous equipments along with their supplier and cost estimation is given in the table below. Bhagsons Leitz 46.15 92. Table 8.82 538.00 36.1.59 36. In lakh) Description of Machines MDF + Refiner + Sanding line Texture Press plates Matt Press plates Cushion pads Flooring line Impregnation line Short Cycle Line Total Supplier Name Kunming Woodbased Pond Machine Plant.2: List of imported Machinery (Rs. In lakh) Description of Machines Steam boiler-6 TPH Thermic Fluid Heater – 2500U * 3 Mobile chippers Compressor with Dryer-Oil free 195 CFM Short Cycle Line Resin Plant Tooling-dimond Total Supplier Name Cheema Boiler Isotex Corportation Surya energy Ingersoll-rand Yalk Ltd.72 76.39 0.K. The break of the POP cost is given below: 90 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .00 50.4: list of other plant and machinery (Rs.4 Preoperative and Preliminary (POP) cost Preliminary & Preoperative Costs include all preliminary and pre-operative costs before commencement of production. panel boards & fittings Electrical 50.00 50. Other plant and Machinery The list of other machinery required for utility and general purpose is mention below along with their supplier name and cost estimation.1.00 2.00 540. electrics & Automation Fabrication work Total Drshini 4.94 Avery India 25.80 10.36 Local supply 50.00 10.00 10. In lakh) Description of Machines Generator set [second hand machinery] Box packing Machinery Air conditioning Fork lifts Trucks Cooling towers RO Plant ETP EOT crane – 5 tones Erection & commissioning Laboratory Equipments Development charges.00 100.41 20.00 1365.00 30.33 90. Exhaust.27 400.82 0.94 0.doc/ .21 320.00 50.00 13.00 825.67 10. deposit.00 250.00 100. Pipes & insulation.00 Chimney Weighing machines with capacity 20 tones Motors.00 80. lighting.00 4.00 phase 2 82.00 20.00 0.48 8. line charges. feeder and transformer charges & 10% application charges Supplier Name Zodiac Genset Godrej TATA Ganara Engineers Pvt.00 35.00 Electrical 200.00 6.96 20.36 49.00 20.00 50.82 30.00 Final Cost 102.00 11.00 24.Amended 26th Nov 2007.96 2.00 100.00 20.00 Cabling.00 20.00 23.60 10. Valves.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Ltd Indian Ion Exchange phase 1 20.00 150. Table 8. 00 85.00 22.6 Margin Money Estimates of working capital requirements have been worked out on the basis of expenditure involving cash liabilities and other recurring requirements considering the norms mentioned below: Table 8.6: Inventory norms Particulars Raw Material Chemicals Work in Progress Finished Goods Receivable (Debtors) Sundry Creditors Phase 1 1.Amended 26th Nov 2007.25 M 0.00 49.00 28. 234 Lakhs in phase 2.5: Preoperative and Preliminary cost break up (Rs. 8. while margin money for working capital works out to Rs. 180 Lakhs in phase 2.25 M The available bank finance for working capital has been considered difference between the net working capital and margin money.25 M 0.00 5.7 Total Project Cost The total project cost for this project has been estimated as given below: 91 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . 100 Lakhs in phase 1 and Rs.1.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.75 7.doc/ .1.1.00 Phase 2 3. Table 8. In lakh) Particulars Legal expenses Interest During construction Start up expenses Upfront/scrutiny fees Total 8.25 5.5 M 1.5 M 0.5 M 0.00 Contingency The contingency provision at roughly 10% works out to Rs.5 M Phase 2 6 M 3 M 0.160 Lakhs in phase 1 and Rs.5 M 1 M 0.00 40.5 M 0. 8.5 Phase 1 5. In lakh) Sr. In lakh) Sr. No. 1 2 3 4 5 6 7 8 9 10 8.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.2 Particulars Phase 1 Phase 2 Total Land Land Development Civil & structural cost Main plant & Equipment Imported Indigenous Other Equipments/Utilities Miscellaneous Fixed Assets Pre Operative & Preliminary Expense Contingency @ 10 % Total Capital Cost of Project Margin money for working capital 85 15 350 0 35 100 85 50 450 267 286 540 15 40 160 1758 100 1029 253 825 15 85 234 2576 180 1296 539 1365 30 125 394 4334 280 Total Cost of Project 1858 2756 4614 Means of Finance Considering Debt Equity Ratio of 2.7: Total Cost of Project (Rs. No. 1 2 3 4 5 Particulars Promoters' Contribution -Share Capital -Pref. the means of finance for the project has been proposed as shown in the table below: Table 8.doc/ .30:1.8: Means of finance (Rs. Table 8.Amended 26th Nov 2007. Share Capital -Reserves & Surplus -Internal Cash Accruals Subsidy Term Loans -FCL -T/L -Rupee Loan -NCD Unpaid Suppliers Unsecured Loans/Deposits TOTAL Phase 1 Phase 2 Total 200 0 0 400 0 300 0 0 500 0 500 0 0 900 0 0 0 1200 0 0 58 1858 0 0 1800 0 0 156 2756 0 0 3000 0 0 214 4614 92 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . 3 Assumptions The important basis & assumptions. 8.255 Sq. are enlisted below: 8.2
Installed Capacity & Utilisation Installed Capacity Phase 1 HDF Flooring Line : 1.Amended 26th Nov 2007. which are considered for the analysis.3. : 100 m3/day Phase 2 Installed capacity of raw board MDF Board Production : 60 % of the installed capacity = 60 m3 / day HDF Board Production : 40 % of the installed capacity = 40 m3 / day MDF Board will further prelam in impregnation line and short cycle press while HDF board will be sent to flooring line for manufacturing laminated flooring.9: Capacity Utilisation in phase 1 Year 2007-08 2008-09 Capacity Utilization 50% 60% Table 8.10: Capacity Utilisation in phase 2 Year Capacity Utilization 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 30% 50% 60% 60% 60% 93 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .doc/ .1 Operating Days & Shifts
No. of Working Days : 300 Days
Shift of Operation : Three Shifts 8.3.374. Mts.
Capacity Utilisation Levels : Table 8.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. The capacity of the flooring line is the same as in phase 1 and total production will be converted into laminate flooring. Fibre Board manufacturing and prelam plant will commence operation from October 2008. / ft2) 18 mm = 408. 380 Rs.88 Rs. Prelam MDF Board and Laminated HDF Flooring.3 Selling Price RDPL will sell only final products in market i. 46 • 1 GBP : Rs. RDPL will focus on the board with the thickness of 12 mm.80 Rs.4 12 mm = 322.3.3. In prelam MDF board manufacturing.84 Rs. / ft2) Exchange Rates • 1 US $ : Rs. the selling price of the Laminated HDF Flooring is estimated at Rs. / m2 (30 Rs. It is also competitive vis-à-vis the imports from China. At per existing market conditions. / ft2) 16 mm = 365. 16 mm and 18 mm which are preferred specifications in the prelam board market.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. / m2 (38 Rs.e. 8. The HDF laminated flooring production will be started in October 2007 with imported HDF board and.3.doc/ .Amended 26th Nov 2007. 88 • 1 Euro : Rs./ m2.5 Operating Norms Operating Norms outlined below have been arrived at after analysis of guaranteed norms provided by client and actual norms collected from similar product producers: 94 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . / m2 (34 Rs. which is lower than the imported European laminated flooring. The estimated prices for these boards are mention below: 8. 60 8. 5 6 15000 100000 360000 264000 30 2 5 8 0.5 8 6 50000 100000 360000 264000 2.49 5.48 28 8 32.11: Operating norms for Fibre Board manufacturing Particulars Cotton stalks/Bagasse Urea Formaldehyde Ammonium Chloride Chemical Buffer Paraffin Wax Electricity Water Thermal Energy-steam Quantity 2 ton 0.00 2.00 95.05 Unit Cycles Cycles Rs. Number Price 2 5 1 20 labour Table 8.18 75 95 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .003 ton 0.25 1. 5 Rs.27 5. 30000 Rs. kcal units Rs.12: Operating norms for Prelam MDF Board manufacturing Particular Base paper Melamine Formaldehyde resin Balancing paper Packing Plate refurbishing costTexture Plate refurbishing cost-Matt Tools & Moulds expense Thermal Energy Power Cost-150 units/hr Direct Labour Cost Total GSM 80 350 Cost per m2 28 Kgs GSM GSM 0. 0.5 50 385 350 100 65 30 18. Table 8. 15000 Rs.5 80 50 65 100 30 32.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.01 ton 400 unit 1 m3 1500000 kcal Unit cost 2000 Rs. 55000 Rs.4 0. kcal units Rs.13: Operating Norms for Laminated HDF Flooring Manufacturing Particulars High abrasive tissue Base paper Balancing paper Melamine Formaldehyde resin Packing Plate refurbishing costTexture Plate refurbishing cost-Matt Tools & Moulds expense thermal energy Power cost-240 units/hr Direct Labour cost Total UNIT GSM GSM GSM Kgs GSM Cycles Cycles Rs. Table 8. 90 Rs. Number Price Cost per m2 48 80 80 0.88 8 4.00057 Rs. 60000 Rs.11 ton 0.003 ton 0.88 8 2.Amended 26th Nov 2007.doc/ .9 5 125. 5% of total Plant and Machinery cost and other assets Financing Terms – Repayment & Interest Project will be implemented in two phases and according to implementation. : Table 8. Lakh.8 : : : : : SLM WDV 0% 3.
Interest on Unsecured Loan : 11 % p.
Interest on Long Term Loan :
Repayment of Long Term Loan 11 % per annum.a.
Repairs & Maintenance 8.22% 96 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .3.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. The increment of 5 % in each following years is considered.Amended 26th Nov 2007. 8.doc/ .34% 10.
Selling Expenses :
Administrative Expenses : 10% of total sales RDPL has well established administrative system therefore administrative expenses are considered 2.5 Rs.34% 6.7




Depreciation Rates Land and Site Development Building and Civil Works Main Plant and Equipment Furniture & Fixture Misc.14: Repayment of Long Term Loan (Rs.10% 15.33% 4.3.3. Fixed Assets 8.00% Income Tax Rates The rate of tax has been computed on following basis:
Corporate Tax : 33. In Lakhs) Year Repayment 2007 –08 2008 – 09 2009 – 10 2010 – 11 2011 – 12 2012 – 13 2013 – 14 2014 – 15 2015 16 0 120 420 600 600 600 480 180 0
Interest on Working Capital (WC) Loan : 9 % p.6 : 1.00% 18.66%
MAT : 11.75% 0% 10% 15.a. RDPL will require the long-term loan. 55 602.71 358.97 366.95 702.45 950.23 1137.89 70.14 1581.59 613.36 947.81 602.15: Profitability Statement Particular Revenue Prelam .73 55.40 44.23 1137.40 38.MDF Laminated Flooring .40 46.61 677.26 1586.72 1896.38 950.00 1590.31 1335.4 Cash flows& Profitability Statement The profitability statement of project is mention below: Table 8.16 511.45 950.59 613.08 55.71 358.47 55.61 677.75 268.87 1593.59 613.02 3378.95 700.59 613.95 693.71 358.05 156.02 602.95 698.59 613.40 40.45 Fixed Cost Sales Expenses Administrative Expenses Repairs & Maintenance Total Fixed Cost 130.71 358.95 694.00 11.45 950.95 591.02 3378.54 55.02 3378.61 677.Amended 26th Nov 2007.20 55.92 Depreciation EBIT 97 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .52 2815.67 1254.71 201.67 602.59 613.61 677.73 1592.17 1588.40 42.00 33.61 677.71 358.02 3378.doc/ .95 696.40 36.71 358.02 3378.45 950.02 3378.59 613.15 358.21 55.32 55.45 950.23 1137.96 541.40 169.95 704.40 34.23 1137.56 602.50 27.07 602.29 55.45 950.23 1137.26 31.71 358.22 237.25 1584.63 602.23 1137.23 1137.61 677.08 792.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.65 153.61 677.34 564.55 15.60 307. 8.02 3378.HDF Total Revenue 2007-08 2008-09 2009-10 2010-11 Year of Operation 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 1306 1306 644 2429 3073 2145 2875 5020 2574 3450 6024 2574 3450 6024 2574 3450 6024 2574 3450 6024 2574 3450 6024 2574 3450 6024 2574 3450 6024 Mfg Cost MDF board mfg cost HDF board mfg cost Prelam Cost Flooring Cost Total Mfg Cost 0 0 0 876 876.74 502. 75 66.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.00 23.79 113.97 159.53 143.doc/ .50 23.16 191.13 1447.37 924.72 93.43 23.17 112.17 914.95 867.95 349.79 245.53 850.74 112.18 96.82 533.79 49.32 112.53 316.04 1275.88 1340.53 421.79 179.79 0.17 112. Particular Financial Charges Working Capital Charges Interest on Term Loan Interest on Unsecured Loan Total Financial Charges PBT Tax PAT 2007-08 2008-09 2009-10 2010-11 Year of Operation 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 27.42 229.17 112.32 105.94 627.94 112.92 204.99 832.83 407.44 489.82 112.53 136.12 98 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .03 20.61 912.99 1211.00 3.79 0.65 889.36 1402.53 382.51 518.35 14.93 105.85 23.83 1442.85 23.85 23.01 450.53 185.99 304.53 250.61 543.Amended 26th Nov 2007.57 361.49 902.88 84.53 136.43 23.79 7.00 23.66 1445.95 31. 53 0.97 -182.85 600.16: Cash flow Statement (Rs.79 533.00 112.doc/ 2013-14 2014-15 2015-16 2016-17 0. 1 2 3 4 5 6 1 2 3 4 5 6 7 8 9 Particulars Sources of Funds : Promoter's Contribution share Capital Internal Cash Accrual Deposits Increase in Long Term Loan Increase in Working Capital Borrowing Depreciation Net Profit Before Tax & Interest (EBIT) Sub.71 0. The cash flow statement of project is mention below: Table 8.61 0.95 0.79 543.87 1487 1593.53 0.01 358.00 23.00 23.67 4429 1254.00 93.00 358.00 0.Total (A) Disposition of Funds : Capital Expenditure Increase in Current Assets TL interest Repayment of Long Term Loan Interest on Deposits Repayment of Deposits Working Capital charges Income-Tax Dividend Sub-Total (B) A-B Year of Operation 2011-12 2012-13 2007-08 2008-09 2009-10 2010-11 200 400 57.50 480. In Lakh) Sr.00 358.85 600.25 1945 1584.00 358.43 420.42 31.00 1951 1590.00 112.068 1155.96 2439 541.79 407.00 23.79 518.00 113.53 0.49 1623 539 1324 627 1301 648 1155 792 842 1103 669 1273 680 1261 .855 1200 308.00 358.00 0.53 0.71 1592.00 49.00 105.00 3. No.11 245.43 180.00 23.00 112.00 23.92 1941 279.71 0.53 0.00 23.00 0.00 0.53 0.73 2161 1758 423.00 112.17 0.00 112.44 66.07 229.65 0.79 489.00 358.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.96 304.35 120.00 27.79 450.00 0.85 600.71 208.00 23.14 1943 1581.53 0.99 204.71 201.37 0.04 268.53 0.29 70.75 20.86 358.53 0.94 2299 140 4233 196 864 623 99 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .00 179.71 0.00 14.88 2576.17 1949 1588.95 0.00 7.068 1800 863.00 112.00 112.71 0.00 358.18 0.71 0.75 300 500 156.Amended 26th Nov 2007.15 -127.26 1947 1586.79 361.00 23. Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Opening Cash Balance Closing Cash Balance 0 140 140 336 336 959 959 1497 1497 2124 2124 2772 2772 3563 3563 4666 The calculation of component of the profitability statement and cash flow statement is mention in annexure in the report.Amended 26th Nov 2007. 100 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .doc/ 4666 5939 5939 7200 . 73 5.96 5.doc/ .5 Financial Indicators. Pay back Table 8.15 Years Rs.48 6. 2.82 Years Rs.61 Average Value PBP 5.NPV.17: Financial Indicators Item Description Value UOM NPV 1. DSCR.61 5.24 6.822 In Rupees Lakhs IRR 17 % DSCR 2. 1.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.572 Lakh Raw material price decrease by 10% 18% 2.98 Years RoI 8.Amended 26th Nov 2007.6 12 to 32 % range (for 10 years) Sensitivity Analysis Table 8.787 Lakh Selling price decrease by 5% 12% 2. 1.822 Lakh Raw material price increase by 10 % 15% 2.067 Lakh Selling price increase by 5 % 21% 2. IRR.98 Years Rs. 8.67 Years Rs.46 Years Rs.18: Sensitivity Analysis Particulars IRR DSCR PBP NPV Base case 17 % 2. 2. 848 Lakh 101 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . Tighter integration on the supply side for cotton stalks and alternatively for bagasse can deftly handle the uncertainties related to raw material availability. 102 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . Overall. thereby enabling the firm to grow both in terms of size. comfortable debt service coverage can be achieved. there exists a good potential for MDF manufacturing unit to be set up in India. Ensuring an efficient supply chain in terms of raw material procurement. the above project appears to be feasible on economic. In case of pressures on the sales price. which is significantly above the cost of capital. 9 Conclusion and Recommendations Looking at the business landscape in totality. imports and exports will definitely help the firm to boost the bottom line. looking at the market growth rate for MDF owing to the increased awareness of customers. product range and profitability. However such a scenario is less likely.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. technical and market criteria. posing no problems to the liquidity (average DSCR is 2. 5% decrease in sales price. the IRR will fall to 12%.doc/ .61). Hence it is worth pursuing the above project to tap the increasing market opportunities. Synergies can be exploited in the case of RDPL who is already into the production of related products and their marketing. the IRR may fall in a non-linear fashion. the boom in construction and under capacity within India. For example. The financial projections under normal circumstances suggest a positive net present value and an internal rate of return of 17%. Under the proposed debt equity ratio.Amended 26th Nov 2007. The existence of marketing channel in India and abroad adds to the overall attractiveness of the project (Read section on growth drivers for more details). doc/ . Appendix A: Fixed Cost Allocation of Contingency and POP expenses (Rs.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.Amended 26th Nov 2007. In Lakh) Cost with Sr. No. Particulars Phase Cost with 1 Contingency Phase Cost with operative 2 Contingency allocation 1 2 3 4 5 6 7 8 Land Land Development Civil & structural cost Main plant & Equipment Imported Indigenous Other Equipments/Utilities Misc Fixed Assets Pre operative Expense Contingency @ 10 % Total Capital Cost of Project Cost with Cost with pre- preoperative Total Cost with Contingency allocation preoperative allocation 85 15 350 94 17 385 96 17 395 0 35 100 0 39 110 0 40 114 85 50 450 85 50 450 88 52 465 267 286 540 15 40 160 1758 294 315 594 17 44 301 323 609 17 1132 278 908 17 94 1174 288 942 17 1296 539 1365 30 125 1296 539 1365 30 125 1338 556 1410 31 1758 1758 1029 253 825 15 85 234 2576 2576 2576 3940 3940 3940 103 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . 27 11.27 1674.93 2016-17 270.77 753.27 11.66 1253.18 105.00 251.42 36.Amended 26th Nov 2007.48 112.48 112.18 421.55 1044.39 9.doc/ 11.73 2009-10 225.04 314.66 1253.64 270.66 1253.53 270.77 753.93 2015-16 270.00 251.23 1578.48 112.48 149.79 11.00 251.00 251.93 37.79 11.32 407.00 251.16 118.18 421.91 1628.94 2010-11 270.66 1253.27 11.93 Year of Operation 2011-12 2012-13 270.27 11.27 1674.93 2014-15 270.79 11.66 1253.31 351.24 93.00 753.42 9.48 112.27 1674.99 11.00 1685.77 753.27 1674.27 1674.48 112.27 11.53 270.40 460.51 1171.53 270.15 27.77 753.77 753.18 421.66 1253.00 1685.77 753.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.16 423.53 270.79 .64 140.50 209.44 308.00 1685.53 270.39 1395.18 421.64 140. In Lakh) Sr.00 251.31 627.75 50.79 11.27 11.64 140.27 11.53 117.53 270.27 1674.77 140.00 251.16 37. Particular 1 2 3 4 5 A Raw material Consumables WIP Finished Goods Debtors Total Current Assets Current Liabilities Sundry Creditors Total Current Liabilities Net Working Capital Bank Finance Margin Money WC Loan interest @ rate 9 % 6 B C D E 2007-08 111.48 112.18 421. Appendix B: Working Capital Statement (Rs.64 140.93 1685. No.79 104 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .00 1685.44 225.62 158.53 270.18 421.01 768.80 54.51 108.00 1685.00 1685.29 115.64 140.66 1253.27 1674.60 2008-09 269.17 1404.93 2013-14 270.48 112.23 50.64 140.79 11.18 421. 00 179.0 960 810.85 600.0 22.08 2008 .0 1410 1260.85 600.00% Quarter Repayment (Rs in Lakh) Outstanding Loan Start of quarter End of quarter Quarterly Interest I 0.15 II 150.Repayment & Interest Phase 1 1200 Term Loan Amount Interest rate Year 2007 .0 1710 1560.0 47.0 1560 1410.0 2.50 480.78 I 150.0 510 360.0 0 0.0 33.0 2880 2820.0 660 510.28 I 150.0 2010 1860. Appendix C: Term Loan .55 III 150.90 IV 150.00 I 0.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.0 77.85 I 60.0 1200 1200.20 II 60.0 51.0 810 660.0 2760 2610.0 55.Amended 26th Nov 2007.11 2011 .15 II 150.0 180 90.35 120.43 420.0 1200 1200.0 4.00 49.65 II 150.00 III 60.0 14.00 304.0 0 0.00 113.0 0.09 2009 .00 II 0.90 IV 90.53 III 150.00 245.00 .00 105 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .0 0 0.0 33.0 1110 960.0 0.doc/ Yearly Interest Yearly Repayment 66.0 7.53 III 150.0 2820 2760.0 0.85 600.0 38.28 I 150.0 1200 1200.0 71.0 67.0 75.0 2940 2880.43 180.0 2310 2160.0 18.0 42.00 IV 0.03 III 90.0 1200 1200.00 7.12 2012 .50 IV 60.00 IV 0.0 2460 2310.0 0.00 0.0 9.0 270 180.13 2013 .0 59.0 33.0 1260 1110.40 IV 150.03 III 150.0 33.0 360 270.00 III 0.00 229.65 II 150.0 34.0 63.95 II 90.0 3000 2940.48 III 0.40 IV 150.0 2160 2010.0 82.14 2014 .0 79.0 1860 1710.15 Phase 2 1800 11.10 2010 .0 80.78 I 150.0 90 0.0 0 0.0 30.00 II 0.0 2610 2460.90 IV 150.43 I 90.0 26. 9 5.0 0.0 0.9 213.9 213.9 213.0 0.0 0.6 1.0 23.9 213.0 23.9 213.9 213.6 1.9 213.9 213.0 0.9 213.5 0.00% Quarter Repayment I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 0.9 57.9 213.9 213.9 0.9 213.0 0.9 213.0 0.13 2013 .0 0.9 213.9 213.5 0.9 5.9 213.9 5.9 5.17 Phase 2 58 156 11.0 23.0 0.0 0.9 213.9 213.0 57.9 5.doc/ .9 5.5 0.9 213.9 213.9 213.9 213.0 23.9 213.0 106 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .9 213.9 213.9 213.5 0.0 0.0 14.14 2014 .5 0.0 0.9 213.9 213.0 0.9 5.9 213.08 2008 .9 213.9 57.0 23.9 3.0 0.0 0.9 5.9 213.9 213.0 23.9 5.9 213.0 0.9 5.9 213.0 0.9 213.0 0.9 5.0 0.9 5.0 23.0 0.9 5.9 213.0 0.0 0.0 0.0 0.5 0.9 213.9 5.0 0.9 5.9 5.9 213.9 213.2 0.9 213.9 57.0 0.12 2012 .6 5.0 0.11 2011 .9 5.9 213.9 213.0 0.0 0.9 5.9 213.9 5.0 0.9 0.9 213.0 0.9 5.9 213.9 213.9 5.9 213.9 5.15 2015 .9 213.9 5.9 57.0 0.9 213.9 213.0 0.9 213.6 1.9 213.9 213.16 2016 .0 0.5 0.9 213.0 1.9 213.9 5.9 5.0 0.9 5.Amended 26th Nov 2007.9 5.9 213.5 0.9 213.0 23.9 213.9 Quarterly Yearly Yearly End of quarter Interest Interest Repayment 0.9 213.0 57.9 5.9 5.09 2009 .0 0.9 213.9 213.9 213.9 57.0 0.9 5.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Appendix D: Unsecured Loan .0 0.9 213.0 0.9 213.0 (Rs in Lakh) Outstanding Loan Start of quarter 0.0 0.9 5.Interest phase 1 Unsecured Loan Amount Interest rate Year 2007 .9 5.9 5.9 213.0 0.9 213.0 0.9 213.10 2010 .9 57.9 213. 28 160.58 152.40 1. 1 2 3 4 5 6 Particulars Land & land Development Civil & structural cost Main plant & Equipment Imported Indigenous Other Equipments/Utilities Miscellaneous Fixed Assets Total 2007-08 0 6.28 160.21 63.62 394.40 1.40 1. Appendix E: SLM Depreciation (Rs.72 1.Amended 26th Nov 2007.62 394.07 2016-17 0 17.21 63.40 1.28 160.doc/ Year of Operation 2011-12 2012-13 0 0 17.40 1.59 2008-09 0 15.07 15.21 268.85 48.21 63.58 152.28 160.07 17.28 111.40 1.07 152.56 16.58 152.62 394.51 0.62 394.40 1.07 2010-11 0 17.58 2013-14 0 17.21 63.40 70.58 .75 91.07 152.10 2009-10 0 17.07 2015-16 0 17. No.62 394.21 63.28 160. In Lakh) Sr.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.68 31.40 1.62 394.58 152.15 152.07 2014-15 0 17.58 152.21 63.28 160.58 107 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .21 63.21 63.62 394.28 160.28 160.62 394. 14 117.47 62.14 220.18 81.23 2016-17 0 10.77 126.53 113.59 70.98 137.58 1.62 4.07 2.20 328.77 97.71 1.30 69.03 2013-14 0 13.05 224.14 238.90 386.40 159. Appendix F: WDV Depreciation (Rs.48 2009-10 0 21.06 365.11 115.77 453.01 58.00 263.48 2015-16 0 11.76 203.32 135.05 83.82 532.77 148. No.26 5.39 162.72 3. 1 2 3 4 5 6 Particulars Land & land Development Civil & structural cost Main plant & Equipment Imported Indigenous Other Equipments/Utilities Miscellaneous fixed Assets Total 2007-08 0 19.75 50.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.38 187.27 96.11 625.36 4.58 24.51 2.Amended 26th Nov 2007.64 190.13 2010-11 0 19. In Lakh) Sr.74 2008-09 0 23.31 113.86 2014-15 0 12.20 45.11 15.41 108 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .62 280.03 3.09 42.doc/ Year of Operation 2011-12 2012-13 0 0 17.84 7.63 36.29 .02 22.22 84.62 99. 53 135.71 306.97 31.37 2015-16 1447.doc/ 2010-11 1211.88 2008-09 191.71 261.14 94.57 1454.58 489.00 94.71 422.61 358.82 358.Amended 26th Nov 2007.06 0 1074.84 0.01 358.71 222.03 70.81 407.67 1614.64 543.97 2009-10 832.97 1338.97 0 1583.95 268.79 608.53 Year of Operation 2011-12 2012-13 1275.02 20.71 496.57 358.84 204. 1 2 3 4 5 6 7 8 9 Particulars Profit Before Tax Add : SLM Depreciation Less : WDV Depreciation Income / Loss Unabsorbed Depreciation / Losses Net Taxable Income Income Tax MAT Final Tax 2007-08 105.77 62.65 143.64 0 1614.00 62.54 31.88 11.51 358.45 204.97 0.49 162.94 93.58 0 1454.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. Appendix G: Tax Statement (Rs.45 533.56 1583.20 543.85 518.83 1340.00 608.71 189.35 407.19 1540.37 161.49 .15 365.81 0 0 1211.17 162.95 450.02 0.97 21.03 0 1540.15 150.35 489.03 518.17 2016-17 1445.78 20.71 358.65 2013-14 1402.92 358.22 1074. In Lakh) Sr.44 358.61 157.90 1211.97 533.95 450.06 361.97 1338.94 109 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report . No.71 582.57 359.94 361.61 2014-15 1442.75 113. 50 23.00 0 28% 2010-11 6023.09 3.38 1478.75 0.64 191.53 358.35 14.95 159.95 268.38 1429.97 1211.97 1447.90 55.71 600.85 23.16 66.36 54.Coverage DSCR Average DSCR 2007-08 1305.23 23.Amended 26th Nov 2007.82 914.00 3.99 304.00 0 32% 69.30 672.80 6.71 0. In Lakh) Sr.00 0 28% 2015-16 6023.61 902.Debt Service .43 23.99 229.00 0 15% 2009-10 5019.13 7.97 1275.97 6023.00 0 29% 2014-15 6023.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.45 1.96 1314.11 23.71 480.00 0 28% 2016-17 6023.53 358.76 869.18 224.53 23.70 110 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .00 23.71 180.83 1340.53 1284.38 737.61 2013-14 6023.58 .71 358.53 358.57 850.doc/ Year of Operation 2011-12 2012-13 6023.53 358.01 867.78 1.71 420.03 84.97 1445. Appendix H: Debt Service Coverage Ratio (Rs.43 210.83 49.00 23.44 912.92 627.65 1.18 70.53 1296.12 0.15 120.00 0 28% 553.53 358.54 105.57 2.97 1385.36 179.13 1.85 23.85 747.88 889.96 1313.66 0.03 1344.88 2.00 600.24 364.53 358. Particulars 1 2 3 4 5 6 7 8 Revenue Profit Before Tax Profit After Tax LT Interest Interest on Deposits Depreciation LT Loan Repayment Deposit Repayment Return on Investment (%) Debt-Service Coverage Ratio .00 0 12% 2008-09 3072.51 924.00 0 0 31% 30% 803.44 1.71 0.71 600.975 832.85 113.04 245.97 1442. No.43 23.97 1402.53 358. 76 5.32 1296.50 649 0.13 1478.65 1314.80 2691.doc/ .36 5272.13 -2782.36 1284.90 3988.Amended 26th Nov 2007.57 1344.68 973 0.45 1385.25 Years 0. In Lakh) Particulars Cash Outflow Cash Inflow Net Cash flow Cumulative Cash flow Payback Period Internal Rate of Return Discount Factor@8% DCF NPV 2007-08 1857.97 1429.49 -5575.97 -1352.63 873 0.44 -3941.822 0.53 1313.50 1385.86 224.86 -3379 Lakh 2009-10 Year of Operation 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 1314.57 1377.92 672.90 1296.46 595 111 P:\Ahmedabad\AMC\USERS\PROJECTS\230431-Rushil -MDF -Feasibility\report\Final Report .60 1478.58 785 0.65 -4260.54 710 0. Appendix I: Pay Back Period & Internal Rate of Return (Rs.95 1344.76 -1633.09 -1633.45 32.58 0.80 1313.74 1086 0.93 -1513 1.98 17% 2008-09 4613.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.47 1429.79 1044 0.22 1284. . Sayan.000 ton 2500 ton 3. Madhi Sugar Factory. Gandhar.000 ton 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Shree Ganesh Khand Udyog Sahakari Mandli Ltd Ganesh Gram. Gandevi. Khusal Pura. No.200 ton 104. Ladhod Shree Sayan Vibhag Sahakari Khand Udyog Mandli Ltd.000 ton 5000 to 6000 ton 10 lakh ton 20 to 25000 ton 10.000 ton 3500 ton 5.21. Name Of Sugar Factory Sugarcane crushed per day Sugarcane crushed per year Bagasse available per year for sale 1 Shree Khedut Sahakari Kahnd Udyog Mandli Ltd. Dharikheda. ParneraPardi.5 lakh ton 15.Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd.5 lakh ton 4. Bardoli. Mahuva Sahakari Khand Udyog Mandli Ltd.000-60.000 ton 2500 ton 4 lakh ton 50.17. Ltd.Navi Prardi. Kamrej Shree Maroli Vibhag Khand Udyog Sahakari Mandli. Bilimora Shree Narmada Khand Udyog Sahakari Mandli Ltd. Appendix J: Availability of Bagasse Sr. Co-Operative Sugarcane Group Union Ltd.000 ton 2500-3000 ton 3.000 ton 2500-3000 ton 5 to 5.000 to 70. Maroli. Bamania. Shree Khedut Sahakari Khand Udyog Mandli Ltd.000 ton 18 lakh ton 65.5 to 6 lakh ton 10.000-40.5 lakh ton 10. Vyara Shree Mahuva Pradesh Sahakari Khand Udyog Mandli Ltd. Pandvai 3500 ton 4-5 lakh ton 25.000 ton 3500 ton 5.000 2500 ton 2 to 2. Chalthan.000 ton 5000 ton 6 lakh ton 30.000 ton 7000 ton 10 lakh ton 50.000 ton 3200 ton 5 lakh ton 25.5 lakh ton “ 5000 ton 9 to 10 Lakh ton 15-17.Valsad Shree Kamrej Vibhag Sahakari Khand Udyog Mandli Ltd.000 ton 6000 ton 10 lakh ton 45.Bhajipura. Madhi Shree Ukai Pradesh Sahakari Khand Udyog Mandli Ltd.Navsari Total 113 .5 lakh ton 15000 ton 66. Vataria Vadodara Dist. Rajpipla Shree Valsad Sahakari Khand Udyog Mandli Ltd. Olpad Shree Chalthan Vibhag Khand Udyog Shahakri Mandli Ltd.Karjan Sardar Co-Operative Sugar Factory.5 lakh ton 12. Techno-Economic Feasibility report of Mott MacDonald Medium Density Fibre Board Rushil Décor Pvt Ltd. 114 .