TIE-ROD END ASSEMBLY AND GEAR SHAFTS A. INTRODUCTION Tie-rod end assemblies and gear shafts are two important components in a vehicle. Steering system in a vehicle is required to turn left or right.tie-rod forms main component in steering system. Gear shafts are required to keep the vehicle in motion at various speeds and loads. B. PRODUCT USES AND SPECIFICATIONS To guide the vehicle along the road and turn left and right as desired an effective steering system is required. The system includes the steering wheel, the steering gear and steering linkages. The steering linkages include Tie-rods, Ball sockets, Tie-rod ends, steering ohms etc. Tie-rod is the one with one end threaded and the other end fitted with ball sockets the former end connected to the wheel. This enables the vehicle to maintain the turning uniform to prevent sideslip and excessive wear. Gear shaft is the shaft in which the gears of various diameters are assembled to enable to shift gear to keep the vehicle in motion at various speeds and loads. The tie-rod end assembly consists of a rack, rack spring, inner thrust bearing, retaining pin ball socket, tie rod, locknut and tie rod end C. MARKET POTENTIAL The products are purchased by original engine and automobile manufacturers as ancillary components. There is also a large demand from replacement markets. The demand of automobile and other engines are increasing every day. There is a large demand for these products in foreign countries also. With the setting up major automobile projects namely Ford Motors, Hyundai Motors, Hindustan Motors, Mitsuibishi and with expansion plans of Ashok Leyland & TAFE, 1
Chennai emerges the Detroit of south East Asia. TamilNadu has always been a forerunner in the industrial process, both in terms of industrial output and also terms of encouraging various new large-scale projects. Having recorded an impressive is growth industry in the post-reform span, it is poised for further industrial development and expansion. At present the state accounts for over 11-12% of India s industrial output. Automobile ancillaries have O.E. Market and Replacement market for all automobile components. With the setting up major automobile projects namely Ford Motors, Hyundai Motors, Hindustan Motors, Mitsuibishi and with expansion plans of Ashok Leyland & TAFE, Chennai emerges the Detroit of south East Asia. TamilNadu has always been a forerunner in the industrial process, both in terms of industrial output and also terms of encouraging various new large-scale projects. Having recorded an impressive is growth industry in the post-reform span, it is poised for further industrial development and expansion. At present the state accounts for over 11-12% of India s industrial output. Automobile ancillaries have O.E. Market and Replacement market for all automobile components. D. TECHNICAL ASPECTS 1. Installed Capacity The proposed machine would work for 2 shifts a day for 300 days. The total machine hours available will be 4500. Out of this 70% efficiency is taken as the achievable production. Each component will take about 2 minutes on this basis the gross production works out to 189000 components per annum. For 3150 machine hours, 70% -Tie rod assembly -160000 nos and 29000 nos Gear shafts per annum 2
2. Plant and Machinery The following machineries are required for production. Machine name Quantity (Nos.) Value (Rs.lakhs) CNC Lathe with all accessories 2 22.80 Hydraulic Hacksaw Machine 1 0.50 Double ended Buffing Machine 1 0.10 Hand drill Machine with stand 1 0.20 Double Ended Bench Grinder with stand 1 0.10 Micrometer,Vernier caliper,digimatic with 1 0.80 Battery vernier Caliper,Slip Gauges Oter Miscellaeous tools 0.50 Total 25.00 3. Manufacturing Process The process of manufacturing would follow general engineering jobs such as drilling, boring, turning, grinding, finishing, etc. These are general engineering jobs and they can be undertaken by skilled operators with the help of preset programme. 4. Raw Material The raw materials required fro the production of tie rod end assembly is EN 8 grade steel and EN 18 grade steel. This material can be procured from any reputed dealers of steel. For manufacturing Gear shafts EN 8 steel is required. For Tie-rods En-8 material in forged condition has to be made available from other forging shops as semi finished product. 5. Land & Building A rented place with 3000 sqft. area is required. The monthly rent is estimated at Rs.15,000 and also an advance of Rs.1,50,000. 6. Utilities Power: The total power requirement of the unit will be 35 HP Water: Water is required only for human consumption. 3
Man power: Category Nos Monthly salary Total Salary Supervisors 1 5000 5000 Operators 4 3000 12000 Unskilled 3 2000 6000 Assistants 2 2500 5000 Security 2 2000 4000 Total 32000 Add 20%benefits 6400 Total 38400 Annually Rs.4.61 lakhs 7. Implementation Schedule If financing arrangement is made available the project can be implemented with in three months period. 8. ASSUMPTIONS Installed capacity per annum 160000 Nos. Tie-Rod Assembly 29000 Nos Gear Shafts Capacity utilization-year -1 60% Year-2 70% Year-3 80% Selling price per unit Tie Rod Assembly-Rs 50.00 per piece Gear shaft-rs 175.00 per piece Material cost at 100% Qty (including wastage) Rate Rs/unit Value (Rs.lakhs) Tie-rod assembly EN-8 Socket semi-finished 160 000 pcs 14/pc 22.40 En-18 Ball Pin Semi-finished 160 000 pcs 14.30/pc 22.88 Sub total 45.28 Gear shaft - EN-8 Steel Rod 38077 Kgs 36/kg 13.71 Consumables and Packing p.a.-at 100%(Rs lakhs) Power and Fuel-100% - Rs lakhs Wages & salaries-100% (Rs.lakhs) Repairs & Maintenance- p.m. Depreciation General & administration Expenses per month Selling expenses Interest on term loan and Working capital finance Income tax provision Rs.0.36 lakhs Rs.5.63 lakhs Rs.4.61 lakhs Rs.5000/- Written Down value Method Rs.50000/- 3% on Sales 14% p.a 36% on profit 4
LIST OF MACHINERY SUPPLIERS CNC-Lathes 1. Madras Mechatronics Pvt Ltd 15/1, Mel ayanambakkam Road Ayanambakkam Ambattur-Vanagaram Road Chennai-600102 2. Vignesh Engineering 225, VGP Nagar Mugappair Chennai-600058 3. HMT ltd 33, Haddows Road Chennai-600 034 Machine Tools 1. Quality Machine Tools New No.238 Linghi Chetty Strret Chennai 600 001 2. Gujrat Machine Tools New No.279, Linghi Chetty Street Chennai 600 001 3. Premier Machine Tools New No.103, Armenian Street Chennai 600 001 4. Machine Centre New No.214 linghi chetty Street Chennai 600 001 LIST OF RAW MATERIAL SUPPLIERS 1. Sai Steel Centre 28-A, Mooker Nallamuthu Street Chennai-600 001 2. Mahavir Indusrial Corporation New 273, Linghi Chetty Street Chennai-600 001 5
3. Bhagawandas Metals ltd No.54, Sembudoss street Chennai-600 001 4. Southern Iron and Steel company ltd No.7, Wallace garden Second Street Chennai-600 006 5. P.K.Vaduvammal 97, Rasappa Chetty Street Chennai-600 003 6
1. COST OF PROJECT [Rs.lakhs] Land & Building (Advance) 1.50 Plant & Machinery 25.00 Electrical 3.00 Other Misc. assets 0.50 Pre-Operative expenses 2.00 Margin for WC 1.66 33.66 2. MEANS OF FINANCE Capital 12.66 Term Loan 21.00 33.66 7
3. COST OF PRODUCTION & PROFITABILITY STATEMENTS [Rs.lakhs] Years 1 2 3 Installed Capacity (No.) Tie rod end assembly 160000 160000 160000 Gear Shafts 29000 29000 29000 Utilisation 60% 70% 80% Production/Sales (No.) Tie rod end assembly 96000 112000 128000 Gear Shafts 17400 20300 23200 Selling Price/piece (in Rupee) Tie rod end assembly Gear Shafts Rs.50 per piece Rs.175 per piece Sales Value (Rs.lakhs) Tie rod end assembly 48.00 56.00 64.00 Gear Shafts 30.45 35.53 40.60 Total sales value 78.45 91.53 104.60 Raw Materials Tie rod end assembly 27.17 31.70 36.22 Gear Shafts 8.23 9.60 10.97 Consumables 0.22 0.25 0.29 Power 3.38 3.95 4.51 Wages & Salaries 4.61 4.84 5.08 Repairs & Maintenance 0.60 0.63 0.66 Depreciation 7.63 5.72 2.91 Cost of Production 51.84 56.69 60.64 Admin, & General expenses 6.00 6.30 6.62 Selling expenses 2.35 2.75 3.14 Interest on Term Loan 2.94 2.57 1.84 Interest on Working Capital 0.76 0.76 0.76 Total 63.89 69.07 73.00 Profit Before Tax 14.56 22.46 31.60 Provision for tax 5.20 8.02 11.28 Profit After Tax 9.36 14.44 20.32 Add: Depreciation 7.63 5.72 2.91 Cash Accruals 16.99 20.16 23.23 8
4. WORKING CAPITAL: [Rs.lakhs] Months Values % Margin Bank Consumption Amount Finance Raw Materials 0.75 2.21 25% 0.55 1.66 Consumables 1.00 0.02 25% 0.01 0.01 Finished goods 0.25 1.08 25% 0.27 0.81 Debtors 0.50 3.27 10% 0.33 2.94 Expenses 1.00 0.50 100% 0.50 0.00 7.08 1.66 5.42 5. PROFITABILITY RATIOS BASED ON 80% UTILISATION Profit after Tax 20.32 Sales 104.60 19% Profit before Interest and Tax 34.20 Total Investment 39.08 88% Profit after Tax 20.32 Promoters'Capital 12.66 161% 9
6. BREAK EVEN LEVEL Fixed Cost (FC): [Rs.lakhs] Wages & Salaries 5.08 Repairs & Maintenance 0.66 Depreciation 2.91 Admin. & General expenses 6.62 Interest on TL 1.84 17.11 Profit Before Tax (P) 31.60 BEL = FC x 100 17.11 80 x FC +P 48.71 100 x 100 28% of installed capacity 10