Profile No.

: 8 NIC Code: 24319

GREY IRON CASTINGS

1. INTRODUCTION:

The Grey Iron Casting is a type of cast iron that has a graphitic micro structure. It is named
after the gray color of the micro structure with free graphite flakes it forms. Gray iron is a
common engineering alloy because of its relatively low cost and good machinability, which
results from the graphite lubricating the cut and breaking up the chips. It also has good galling
and wear resistance because the graphite flakes self-lubricate. The graphite also gives gray
iron an excellent damping capacity because it absorbs the energy and converts it into heat. It
is the most common cast iron and the most widely used cast material.

2. PRODUCT & ITS APPLICATION:

Cast iron's properties are changed by adding various alloying elements. Silicon is the most
important alloy element because it helps in forming free graphite. A low percentage of silicon
allows carbon to remain in solution forming iron carbide and the production of white cast iron.
A high percentage of silicon forces carbon out of solution forming graphite and the production
of Grey cast iron. Other alloying agents are manganese, chromium, molybdenum, titanium and
vanadium etc. that counteracts silicon, promotes the retention of carbon, and the formation of
carbides in micro structure, thereby improving tensile strength, impact strength, wear and heat
resistance, corrosion resistance etc. Nickel and copper increase strength, and machinability,
but do not change the amount of graphite formed.

It has a number of desirable characteristics not possessed by any other metal and yet is
among the cheapest of ferrous materials available to the engineer. Gray iron castings are
readily available in nearly all industrial areas and can be produced in foundries representing
comparatively modest investments.
It is used for machinery body and rotating machine housings where the stiffness of the
component is more important than its tensile strength. Alloy gray iron is very popular for
internal combustion engine cylinder blocks, pump housings, valve bodies, machine tools, heavy
earth movers and stationary machinery. In addition it is suitable for electrical boxes and
decorative castings due to its properties/ Grey cast iron's high thermal conductivity and
specific heat capacity are often exploited to make cast iron cookware and disc brake rotors.

3. DESIRED QUALIFICATIONS FOR PROMOTER:

Preferably metallurgical or mechanical engineer.

4. MARKET POTENTIAL AND MARKETING ISSUES. IF ANY:

Premium quality “Grey Iron Castings” are used widely for engineering products and
components such as Industrial machines, castings for motor body, pulley casting, coupling
casting, trolley casting, valves, valve actuators, pulleys, pumps, turbines, oil machinery, textile
machinery, plastic machinery, mining and minerals crushers, agri machinery, motor covers,
hubs and many others.

Some of the alloy added Grey iron castings are very widely used in automotive and heavy
machines. In view of the wide application in industry, a good unit will have very good scope of
developing products for existing and new applications for the consumers of these castings.

5. RAW MATERIAL REQUIREMENTS:

Main raw materials are pig iron, cast iron scarp and metallurgical coke. Other materials are
alloying additives and molding adhesives like molasses graphite and silicon, manganese etc.

6. MANUFACTURING PROCESS:

Grey cast Iron castings are produced by melting pig iron and C.I. scrap in melting furnace. The
molten metal is poured in dry sand molds. Castings are taken out of the mold after getting
cooled. After breaking the runner and risers castings are fettled properly. Pattern design and
mold preparation is a very critical operation for gray iron casting and may have big impact on
profitability of the project.

Sand casting, uses sand clay and binder mix to prepare mold for casting, various types of
processes are available for sand mold preparation depending on the design and shape of
casting, intricacy of shape and volume of production of the parts to be produced.

Green Sand casting and shell casting technology are two most popular sand casting processes.
Green sand molding is the most economical method of producing castings and large castings
of up to 500 kg per piece can be made in green sand. For the larger castings, the mold
surfaces are sometimes sprayed with a graphite mix and skin is dried to produce a cleaner
surface on the casting. This procedure is often used on engine blocks. To withstand the higher
electrostatic pressures developed in pouring larger castings; dry sand molds are often used.

The shell molding process is also used for it has ability to get hard mold or core, improving the
accuracy and finish of the casting. Centrifugal casting of gray iron in water-cooled metal molds
is widely used by the cast iron pipe industry as well as for some other applications.

Raw castings undergo the process of cutting, grinding, shaving or sanding away these
unwanted bits is called "fettling". Fettling can add significantly to the cost of the resulting
product, and designers of molds seek to minimize it through the shape of the mold, the
material being cast, and sometimes by including decorative elements. Theses castings may be
machined for semi-finished component for supply to customer.

7. MANPOWER REQUIREMENT:

The unit shall require highly skilled service persons. The unit can start from 19 employees
initially and increase to 49 or more depending on business volume.
 Monthly
Sr. No Type of Employees No of Employees
Salary
Year 1 Year 2 Year 3 Year 4 Year 5
1 Skilled Operators 18000 4 6 8 10 12
2 Semi-Skilled/ Helpers 7000 12 16 20 24 30
3 Supervisor/ Manager 30000 1 1 1 2 2
4 Accounts/ Marketing 16000 1 2 2 3 3
5 Other Staff 7000 1 1 2 2 2
TOTAL 19 26 33 41 49

8. IMPLEMENTATION SCHEDULE:

The unit can be implemented within 6 months from the serious initiation of project work.

Sr. No Activities Time Required in Months

1 Acquisition of Premises 2
2 Construction (if Applicable) 2
3 Procurement and Installation of Plant and Machinery 2
4 Arrangement of Finance 2
5 Manpower Recruitment and start up 2
Total Time Required (Activities run concurrently) 6

9. COST OF PROJECT:

The unit will require total project cost of Rs 148.69 lakhs as shown below:

Sr No Particulars In Lakhs
1 Land 15.00
2 Building 25.00
3 Plant and Machinery 36.59
4 Fixtures and Electrical Installation 4.80
5 Other Assets/ Preliminary and Preoperative Expenses 2.00
6 Margin for working Capital 65.30
TOTAL PROJECT COST 148.69
10. MEANS OF FINANCE:

The project will require promoter to invest about Rs 86.14 lakhs and seek bank loans of Rs
62.54 lakhs based on 70% loan on fixed assets.

Sr No Particulars In Lakhs
1 Promoters Contribution 86.14
2 Loan Finance 62.54
TOTAL: 148.69

11. WORKING CAPITAL REQUIREMENTS:

Working capital requirements are calculated as below:

Sr No Particulars Gross Amount Margin % Margin Amount Bank Finance

1 Inventories 46.42 40 18.57 27.85

2 Receivables 50.49 50 25.25 25.25
3 Overheads 2.92 100 2.92 0.00
4 Creditors 46.42 40 18.57 27.85
TOTAL 146.24 65.30 80.95

12. LIST OF MACHINERY REQUIRED:

Sr. No Particulars UOM Quantity Rate Total Value

Main Machines/ Equipment

Metal Melting Furnace 1000 kg and
1 Nos 2 750000 1500000
500 kg
2 Molding Machines Nos 6 100000 600000
3 Sand mixer, sieves etc. Nos 1 80000 80000

4 Core molding Machine 2 40000 80000

Nos
5 Sand reclamation System Nos 1 130000 130000
Sr. No Particulars UOM Quantity Rate Total Value

Core Baking oven with burner/ temp

6 Nos 1 75000 75000
control fan/ blower etc.
7 Ladle with heating system Nos 2 30000 60000
8 Jib Crane Nos 1 130000 130000
9 Shot blasting machine Nos 1 175000 175000
10 Lathe Machine Nos 3 75000 225000
11 Drilling Machine Nos 1 50000 50000
12 Milling Machine Nos 1 200000 200000
13 Mold Boxes and tools LS 1 100000 100000
14 Bench/ Flexible shaft grinders Nos 3 8000 24000
15 Metallurgical Microscope Nos 1 80000 80000
16 Physical testing Lab LS 1 150000 150000
17 Chemical Test Lab LS 1 80000 80000
Subtotal: 3429000
Tools and Ancillaries
1 Patterns tools and gauges LS 1 150000 150000
2 Misc. tools etc. LS 1 80000 80000
Subtotal: 230000

Fixtures and Elect Installation

Storage racks and trolleys LS 1 30000 30000

Other Furniture LS 1 40000 40000
Telephones/Computer LS 1 150000 150000
Electrical Installation LS 1 260000 260000
Subtotal: 480000
Other Assets/ Preliminary and
LS 1 200000 200000
Preoperative Expenses

TOTAL PLANT MACHINERY COST 4339000

13. PROFITABILITY CALCULATIONS:

Sr. No Particulars UOM Year Wise estimates

Year 1 Year 2 Year 3 Year 4 Year 5

1 Capacity Utilization % 40 50 60 70 80
2 Sales Rs Lakhs 605.94 757.42 908.90 1060.39 1211.87
3 Raw Materials & Other Direct Inputs Rs Lakhs 557.01 696.26 835.51 974.77 1114.02
4 Gross Margin Rs Lakhs 48.93 61.16 73.39 85.62 97.85
5 Overheads Except Interest Rs Lakhs 26.23 26.23 26.23 26.23 26.23
6 Interest Rs Lakhs 8.76 8.76 8.76 8.76 8.76
7 Depreciation Rs Lakhs 6.84 6.84 6.84 6.84 6.84
8 Net Profit Before Tax Rs Lakhs 7.11 19.34 31.57 43.80 56.03

14. BREAK EVEN ANALYSIS

The project is can reach break-even capacity at 42.02 % of the installed capacity as depicted
here below:
Sr. No Particulars UOM Value
1 Sales at Full Capacity Rs Lakhs 1514.84
2 Variable Costs Rs Lakhs 1392.52
3 Fixed Cost incl. Interest Rs Lakhs 41.82
4 Break Even Capacity % of Inst Capacity 34.19