Introduction

The project report for handbag-puse manufacturing is as follows: The burgeoning middle class coupled with increasing working women population, increasing media exposure and access to international trends has opened up an array of opportunities for brands with women specific products. Handbag is one such product practically inseparable from the personality of a woman across sections of the society in India.
The growth in ladies handbags is driven by urban conglomerations across Tier 1, Tier 2 and Tier 3 cities in India which are witnessing changing retail landscape and bringing brands to the door steps of the consumers. One cannot ignore the evidently increasing role of e-commerce, which is enabling further reach to consumers across length and the breadth of the country.The estimated market opportunity in ladies handbag based on the consumer survey conducted across urban conglomerations is ~Rs 36 billion, with leading markets being 8 Tier 1 cities with market size of ~Rs 18 billion, followed by Tier 2 cities (41 cities) and Tier 3 cities (41 cities) cities at ~Rs 15 billion and ~Rs 3billion respectively.

The key success factors of this industry are design / style / fashion, Brand, Product Quality and pricing to name a few. However the industry attractiveness is also comes with the challenges such as lower product life cycles, influx of counterfeits and presence of large unorganized segment. The main categories in ladies handbag are leather and non-leather handbags. The presence of brands in leather handbags is limited as compared to higher brand concentration in terms of non- leather handbags. The leather handbag products typically have higher pricing as compared to non-leather goods, with limited consumer base. The key difference as observed between the brands from leather and non- leather handbag brands is that the leather brands have a wider portfolio in terms of price point to cater to varied needs of the consumers in contrast to brands with non-leather products, which focus on narrow pricing based specific segments.

Scope of the project

The women handbags market in India is estimated at Rs 3600 crore. It is projected to grow at about 15 per cent annually in the next five years to Rs 6,000 crore. The key growth drivers are: increasing number of working women, their rising incomes, increasing fashion consciousness and aspiration levels, and growing influx of foreign brands. The Majority of the market (about 70 per cent) belongs to unbranded products, including local or regional brands. However, going forward the growth rate of the branded segment is estimated to be much higher (about 25 per cent) than the overall market. The key success factors of this industry are design / style / fashion, Brand, Product Quality and pricing to name a few. However the industry attractiveness is also comes with the challenges such as lower product life cycles, influx of counterfeits and presence of large unorganized segment. The main categories in ladies handbag are leather and non-leather handbags. The presence of brands in leather handbags is limited as compared to higher brand concentration in terms of non- leather handbags. The leather handbag products typically have higher pricing as compared to non-leather goods, with limited consumer base

Location, Land , Building & Utilities

Product / Services & process

The firm is planning to introduce high quality ladies leather handbags, sling bags and clucthes . Handbags with vide variety of design, colour and size are considered. The growth in ladies handbags is driven by urban conglomerations across Tier 1, Tier 2 and Tier 3 cities in India which are witnessing changing retail landscape and bringing brands to the door steps of the consumers. One cannot ignore the evidently increasing role of e-commerce, which is enabling further reach to consumers across length and the breadth of the country.

Various coponents of the products are marked as per the pattern in leather and cut into different pieces. The edges of these /components are stained by hand to remove bulkness at seams. Then the components of lining are clicked. Once the leather has been tanned it is hand-rolled using a heavy rolling pin, which gives the leather a beautiful smoothness whilst maintaining it’s natural grain that helps give the leather it’s distinctive vintage feel.The leather is then ready to be hand-cut into each section of the bag using a variety of metal templates. The canvas lining is then glued on to keep it flat against the leather whilst it is double stitched together. This adds strength as well as allowing zip pockets and tablet or laptop sleeves to be added.Now each section is ready to be double stitched togetherOnce the general structure of the leather satchel, messenger bag or travel bag has been securely formed the straps and buckles and handles are then strongly riveted and double stitched on.The leather bag is now given a thorough final check to make sure it is perfect. Once the bag has been completed it is then given a coat of mustard seed oil, which helps nourish the leather, helps waterproof it and further deepens the rich tan colour. The decorative items like buckles; buttons, chains etc. are fitted. Then the bags are taken for finishing and removing different defects. Before taking the bags for marketing they are packed properly.

Manufacturing Process:
Various components of the products are marked as per the pattern in leather and cut into different pieces. The edges of these /components are stained by hand to remove bulkiness at seams. Then the components of the lining are clicked. Once the leather has been tanned it is hand-rolled using a heavy rolling pin, which gives the leather a beautiful smoothness whilst maintaining its natural grain that helps give the leather its distinctive vintage feel. The leather is then ready to be hand-cut into each section of the bag using a variety of metal templates. The canvas lining is then glued on to keep
it flat against the leather whilst it is double stitched together. This adds strength as well as allowing zip pockets and tablet or laptop sleeves to be added. Now each section is ready to be double stitched together Once the general structure of the leather satchel, messenger bag or travel bag has been securely formed the straps and buckles and handles are then strongly riveted and double stitched on. The leather bag is now given a thorough final check to make sure it is perfect. Once the bag has been completed it is then given a coat of mustard seed oil, which helps nourish the leather, helps waterproof
it and further deepens the rich tan color. The decorative items like buckles; buttons, chains etc. are fitted. Then the bags are taken for finishing and removing different defects. Before taking the bags for marketing they are packed properly.

Raw materials / Consumables

The following are the main raw materials used in the production of handbags

Leather	Backers
Lining	Adhesives
Sewing Thread	Zipper
Hardware	Logo
Jute Bag	Edge Paints

Polyurethane (PU) is a composite material made of one or more layers of PU and a woven or non woven textile backing such as bi-cast or ground leather. This fabric provides the most realistic imitation of leather when it comes to its soft supple hand. It is also known to wrinkle like leather when gathered, stitched, or tufted. Its light weight body makes it inherently more breathable than PVC and allows it to adjust to body temperature more quickly. Its naturally rubbery characteristic guarantees a better stretch and performance in low temperatures. Although PU fabrics are not naturally flame resistant, flame retardants may be added to the material during manufacturing. Ofcourse, PU fabrics are much lower in price than genuine leather; they tend to be higher in cost than PVC. PU is known to be a greener alternative to PVC in both production and after-care. It does not require the same chemical plasticizers and will eventually degrade over time.

Polyvinylchloride (PVC), also commonly referred to as vinyl, is essentially a flexible plastic made from PVC resin, various fillers, and additives such as plasticizers to manipulate its softness, color and texture. Once the desired fillers have been added, PVC is used to coat one side of a knit or woven fabric backing and sometimes a center layer of foam. This versatile fabric provides a durable surface that is impervious to moisture and inherently flame resistant, making it ideal for marine, healthcare and high traffic hospitality and commercial environments. Despite its flame-resistant qualities, the addition of flame retardants is typical during manufacturing to meet fire code standards. Although PVC resin is comparatively inexpensive to genuine leather, the price is often determined by the cost of the additives used to make the finished product. The environmental effects of PVC have continued to improve over the years, lowering emissions and hazardous waste. Today, vinyl manufacturers recycle PVC waste back into the process to minimize the amount of non-biodegradable product in landfills.

Plant & Machinery / Equipments

The following are the list of machineries used in the production process

Piping, Handle trimming, Hot glazing machines	Stamping machine for Upper
Hydrolic Ironing and Embossing press	Skiving Machine
Strap cutting machine	Micro computer belt cutting
Riveting Mechine	Industrial sewing machine

Market potential & Strategy

The firm have already analyzed the ground level information on Handbags selling and tied up with few retailers. Their Handbags prices are fixed according to market requirements and it has been discussed with retailers at ground level already. Most of the retailers in state are going to Delhi or Mumbai to buy Handbags. They are going to provide Top Notch quality Leather Handbags to retailers at the best price. They will also deliver it to their shops.

The growth in ladies handbags is driven by urban conglomerations across Tier 1, Tier 2 and Tier 3 cities in India which are witnessing changing retail landscape and bringing brands to the door steps of the consumers. One cannot ignore the evidently increasing role of e-commerce, which is enabling further reach to consumers across length and the breadth of the country.The estimated market opportunity in ladies handbag based on the consumer survey conducted across urban conglomerations is ~Rs 36 billion, with leading markets being 8 Tier 1 cities with market size of ~Rs 18 billion, followed by Tier 2 cities (41 cities) and Tier 3 cities (41 cities) cities at ~Rs 15 billion and ~Rs 3billion respectively.

The knowledge of online market and the strong distribution network is the USP of the retailing the firm. The promoter is having expert knowledge in Online based sales and the personal connections in this field is an added advantage to the firm. They already planned for a mass camaign with printed brouchers to educate and make the user aware about the product and its quality. More over the deisgn trends and colours are very important, so that the company is keenly investing in that area to get moe attraction of users. By providing good margin to the resellers and by giving small ads in the media will help boost the brand image.

Project at a glance

Name & Address of Unit

Handbag-purse manufacturing

Address

Details of unit

Email	:	[email protected]
Phone	:	00000
Constitution	:	Proprietership
Total project cost	:	*******
Fixed Capital	:	*******
Working Capital	:	*******
Total Bank loan	:	*******
Promoter(s) contribution	:	*******
Term loan	:	*******
Working capital loan	:	*******

Name & address of promoter(s)

Name		: Your name
Address		: Address
Phone		: 0000
Designation		: Proprietor
E-mail		: [email protected]

Project Feasibility Ratios

Debt Service Coverage Ratio (Average)

:1.87

Current ratio (Average)

:2.63

	Year 1	Year 2	Year 3	Year 4	Year 5
Current ratio	1.53	2.06	2.62	3.19	3.76
Quick ratio	1.13	1.56	2.10	2.64	3.18
Interest coverage ratio	3.87	5.55	7.00	9.48	14.71
Debt equity ratio	2.863	2.080	1.528	1.020	0.542
TOL/TNW	3.02	1.45	0.79	0.43	0.21
DSCR	1.65	1.86	1.90	1.94	1.97
Gross profit Sales Percentage %	29.23 %	28.54 %	28.18 %	27.86 %	27.50 %
Net profit Sales Percentage %	10.84 %	10.56 %	11.10 %	11.57 %	11.90 %
BEP in % of installed capacity %	49.90 %	27.12 %	27.12 %	27.12 %	27.12 %
BEP in sales of Rs	2,620,800.00	1,840,695.65	1,972,173.91	2,103,652.17	2,235,130.43
Return On Capital Employed	0.26	0.34	0.34	0.33	0.33

Project Feasibility graph

Net profit Sales %

Quick ratio

Revenue v/s Expense

Expense Splitup

Project Cost

Sl. no	Item	Amount Rs
1	Building lease advance	*******
2	GT2153 - Industrial sewing machine	*******
3	GC246 - Industrial sewing machine	*******
4	GC1341- Industrial sewing machine	*******
5	GC0322- Industrial sewing machine	*******
6	Piping, Handle trimming, Hot glazing machines	*******
7	Generator	*******
8	Stamping machine for Upper	*******
9	Hydrolic Ironing and Embossing press	*******
10	Skiving Machine	*******
11	Strap cutting machine	*******
12	Micro computer belt cutting	*******
13	Riveting Mechine	*******
14	Laptop & computers	*******
15	Office set up	*******
16	Designing	*******
17	Training expenses	*******
18	Marketing Agent Expenses, Digital Marketing & Advertising Expenses	*******
19	Handbag Photos, Editing, Brochures & Catalogue Expenses	*******
20	Transportation	*******
21	Machinery Transportation & Assembling expenses	*******
22	Working Capital	*******
	Total	*******

Working Capital Computation

Sl. no	Item	Amount Rs
1	Consumables / stock in hand	*******
2	Work in progress	*******
3	Finished goods	*******
4	Working expense.	*******
5	Receivables/Sundry debtors	*******
6	Payables	*******
7	Total working capital	*******
8	Own Contribution	*******
9	Working capital loan	*******

Annual Sales / Revenue

Sl. no	Item	Rate		Quantity	Unit	Total Rs
1	Sling bag PVC	*******	X	10800	Number	*******
2	Clutches PU	*******	X	10800	Number	*******
3	Clutches PVC	*******	X	9600	Number	*******
4	Sling bag PU	*******	X	10800	Number	*******
5	Handbag PVC	*******	X	36000	Number	*******
6	Handbags PU	*******	X	12000	Number	*******
	Total					*******

Total Yearly Expense

Sl. no	Item	Amount Rs
1	Rent	*******
2	Strap worker	*******
3	Gluing workers (2) nos	*******
4	Cutting workers (2 nos)	*******
5	Sewing workers (4 nos)	*******
6	Managers (2 nos)	*******
7	Supervisor	*******
8	Accountant	*******
9	Maintanance	*******
10	Electricity	*******
11	Office expense	*******
12	Raw material	*******
13	Helpers (2 nos)	*******
14	Servant	*******
15	Marketing/Advertisement	*******
16	Other variable cost	*******
	Total	*******

Application of Fund

Sl. no	Item	Subsidy %	No.	Rate	Amount Rs
1	Building lease advance	*******	1	*******	*******
2	GT2153 - Industrial sewing machine	*******	1	*******	*******
3	GC246 - Industrial sewing machine	*******	2	*******	*******
4	GC1341- Industrial sewing machine	*******	2	*******	*******
5	GC0322- Industrial sewing machine	*******	5	*******	*******
6	Piping, Handle trimming, Hot glazing machines	*******	1	*******	*******
7	Generator	*******	1	*******	*******
8	Stamping machine for Upper	*******	1	*******	*******
9	Hydrolic Ironing and Embossing press	*******	1	*******	*******
10	Skiving Machine	*******	1	*******	*******
11	Strap cutting machine	*******	1	*******	*******
12	Micro computer belt cutting	*******	1	*******	*******
13	Riveting Mechine	*******	1	*******	*******
14	Laptop & computers	*******	1	*******	*******
15	Office set up	*******	1	*******	*******
16	Designing	*******	1	*******	*******
17	Training expenses	*******	1	*******	*******
18	Marketing Agent Expenses, Digital Marketing & Advertising Expenses	*******	1	*******	*******
19	Handbag Photos, Editing, Brochures & Catalogue Expenses	*******	1	*******	*******
20	Transportation	*******	1	*******	*******
21	Machinery Transportation & Assembling expenses	*******	1	*******	*******
	Total Investment				*******
	Total Subsidy				*******
	Net Investment				*******

Means of Finance

Sl. no	Item	Amount
1	Term Loan	*******
2	Working capital Loan	*******
3	Total loan	*******
4	Term Loan contribution	*******
5	Working capital contribution	*******

Profitability Statement

		Year 1(!*)	Year 2	Year 3	Year 4	Year 5
Revenue from operation
Sales	15.93	*****	*****	*****	*****	*****
Add :
Closing stock		*****	*****	*****	*****	*****
Total		*****	*****	*****	*****	*****
Less :
Opening stock		*****	*****	*****	*****	*****
Stock purchase	7.20	*****	*****	*****	*****	*****
Salary	3.60	*****	*****	*****	*****	*****
Repairs and maintenance charges	0.24	*****	*****	*****	*****	*****
gas	0.12	*****	*****	*****	*****	*****
ELECTRICITY bill	0.12	*****	*****	*****	*****	*****
Total		*****	*****	*****	*****	*****
Gross profit		*****	*****	*****	*****	*****
Less :
Rent	0.12	*****	*****	*****	*****	*****
Telephone/Postal &internet charge	0.12	*****	*****	*****	*****	*****
Total		*****	0*****	*****	*****	*****
Depreciation		*****	*****	*****	*****	*****
Interest on TL		*****	*****	*****	*****	*****
Interest on WC		*****	*****	*****	*****	*****
Total		*****	*****	*****	*****	*****
Profit before tax		*****	*****	*****	*****	*****
Income Tax		*****	*****	*****	*****	*****
Profit after tax		*****	*****	*****	*****	*****

Cash flow statement

Cash Inflow	Pre operative period	Year 1	Year 2	Year 3	Year 4	Year 5
Capital	0.63	*****	*****	*****	*****	*****
Subsidy	*****	*****	*****	*****	*****	*****
Termloan	*****	*****	*****	*****	*****	*****
Profit before tax with interest	*****	*****	*****	*****	*****	*****
Increase in WC loan	*****	*****	*****	*****	*****	*****
Depreciation	*****	*****	*****	*****	*****	*****
Increase in Current liability	*****	*****	*****	*****	*****	*****
Total Cash Inflow	*****	*****	*****	*****	*****	*****
Cash Outflow
Fixed Assets	*****	*****	*****	*****	*****	*****
Increase in Current asset		*****	*****	*****	*****	*****
Interest on TL	*****	*****	*****	*****	*****	*****
Interest on WC	*****	*****	*****	*****	*****	*****
Income Tax	*****	*****	*****	*****	*****	*****
Decrease in Term loan		*****	*****	*****	*****	*****
Drawing	*****	*****	*****	*****	*****	*****
Total Cash Outflow	*****	*****	*****	*****	*****	*****
Opening balance	*****	*****	*****	*****	*****	*****
Net Cashflow	*****	*****	*****	*****	*****	*****
Closing balance	*****	*****	*****	*****	*****	*****

Balance sheet

Liability	Pre operative period	Year 1	Year 2	Year 3	Year 4	Year 5
A. Share holders funds
Capital	*****	*****	*****	*****	*****	*****
Reserve & Surplus	*****	*****	*****	*****	*****	*****
B.Non current Liabilities
Termloan	*****	*****	*****	*****	*****	*****
C.Current Liabilities
Working capital loan	*****	*****	*****	*****	*****	*****
Account payable		*****	*****	*****	*****	*****
Total Liability	*****	*****	*****	*****	*****	*****
Asset
A. Non current Assets
Fixed Assets	*****	*****	*****	*****	*****	*****
B. Current Assets
Inventory	*****	*****	*****	*****	*****	*****
Trade receivables	*****	*****	*****	*****	*****	*****
Cash and cash equivalence	*****	*****	*****	*****	*****	*****
Total Asset	*****	*****	*****	*****	*****	*****

Repayment of Term loan

Year	Installment	Outstanding at the beginning	Principal repayment	Interest	Amount paid	Outstanding at the end
1	1	*****	*****	*****	*****	*****
1	2	*****	*****	*****	*****	*****
1	3	*****	*****	*****	*****	*****
1	4	*****	*****	*****	*****	*****
1	5	*****	*****	*****	*****	*****
\|	\|	\|	\|	\|	\|	\|
\|	\|	\|	\|	\|	\|	\|
5	56	*****	*****	*****	*****	*****
5	57	*****	*****	*****	*****	*****
5	58	*****	*****	*****	*****	*****
5	59	*****	*****	*****	*****	*****
5	60	*****	*****	*****	*****	*****

Debt Service Coverage Ratio

Particulars	Year 1	Year 2	Year 3	Year 4	Year 5
Receipts
a).Net Profit	*****	*****	*****	*****	*****
b).Depreciation	*****	*****	*****	*****	0.30
c).Interest on termloan	*****	*****	*****	*****	*****
Total	*****	*****	*****	*****	*****
Repayments
a).Loan Principal	*****	*****	*****	*****	*****
b).Interest on termloan	*****	*****	*****	*****	*****
Total	*****	*****	*****	*****	*****
DSCR	*****	*****	*****	*****	*****

Depreciation

Particulars	Rate	Year 1	Year 2	Year 3	Year 4	Year 5
Building	*****	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Computers/ Printers /Photocopier/Electronic gadget	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Furniture & fixtures	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Racks & storage/Interior works	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
new item	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
new	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Air-conditioning	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Other investments	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Total less depreciation		*****	*****	*****	*****	*****
Total written down value		*****	*****	*****	*****	*****

Conclusion

The project as a whole describes the scope and viability of the Trading industry and mainly of the financial, technical and its market potential.The project guarantee sufficient fund to repay the loan and also give a good return on capital investment. When analyzing the social- economic impact, this project is able to generate an employment of 5 and above. It will cater the demand of Trading and thus helps the other business entities to increase the production and service which provide service and support to this industry. Thus more cyclic employment and livelihood generation. So in all ways, we can conclude the project is technically and socially viable and commercially sound too.

View a sample report in pdf

Click here to create a project report for your business in less than 10 mins