PROJECT REPORT

Of

ENGINE COOLANT

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Engine Coolant Manufacturing unit.

The objective of the pre-feasibility report is primarily to facilitate potential entrepreneurs in project
identification for investment and in order to serve his objective; the document covers various aspects
of the project concept development, start-up, marketing, finance and management.

[We can modify the project capacity and project cost as per your requirement. We can also prepare
project report on any subject as per your requirement.]

Lucknow Office: Sidhivinayak Building ,

27/1/B, Gokhlley Marg, Lucknow-226001

Delhi Office : Multi Disciplinary Training

Centre, Gandhi Darshan Rajghat,
New Delhi 110002

Email : [email protected]
Contact : +91 7526000333, 444, 555
 PROJECT AT A GLANCE
1 Name of the Entreprenuer xxxxxxxxxx

2 Constitution (legal Status) : xxxxxxxxxx

3 Father / Spouse Name xxxxxxxxxxxx

4 Unit Address : xxxxxxxxxxxxxxxxxxxxxx

District : xxxxxxx
Pin: xxxxxxx State: xxxxx
Mobile xxxxxxx

5 Product and By Product : ENGINE COOLANT

6 Name of the project / business activity proposed : ENGINE COOLANT MANUFACTURING UNIT

7 Cost of Project : Rs.24.86 Lakhs

8 Means of Finance
Term Loan Rs.15.98 Lakhs
Own Capital Rs.2.49 Lakhs
Working Capital Rs.6.4 Lakhs

9 Debt Service Coverage Ratio : 2.25

10 Pay Back Period : 5 Years

11 Project Implementation Period : 5-6 Months

12 Break Even Point : 35%

13 Employment : 12 Persons

14 Power Requirement : 30.00 HP

Ethylene Glycol, Sodium Benzoate, Phosphoric Acid,

15 Major Raw materials
: Antifoaming Agent, Dyestuff, Water and other material.

16 Estimated Annual Sales Turnover (Max Capacity) : 140.71 Lakhs

17 Detailed Cost of Project & Means of Finance

COST OF PROJECT (Rs. In Lakhs)

Particulars Amount
Land Own/Rented
Plant & Machinery 17.25
Furniture & Fixtures 0.50
Working Capital 7.11
Total 24.86

MEANS OF FINANCE
Particulars Amount
Own Contribution 2.49
Working Capital(Finance) 6.40
Term Loan 15.98
Total 24.86
 ENGINE COOLANT MANUFACTURING UNIT

Introduction:

An engine coolant, also known as an “Anti-freeze” is a liquid that runs through the
engines of the Automobiles to keep it within its correct operating temperature or
resists over-heating of the engine. It is generally prepared with Ethylene Glycol or
Propanol along with some additives. It is generally green, pink, or blue in color. The
engines of the automobiles produce a lot of heat when they are running and should
be cooled continuously to avoid engine damage. The cooling system in the cars, send
the coolant through the passages in the engine blocks and heads. As the coolant runs
through these passages, it picks up the excess heat thereby causing a decrease in the
temperature of the car engine. The heated liquid finds its way to the radiator of the
car through the rubber hose. As it flows through the thin tubes in the radiator, the
hot liquid is cooled by the stream of air entering the engine compartment from the
grill in front of the car. Once the fluid is cooled, it returns back to the engine to pick
up more heat. Water alone cannot keep the engine cool as due to the intense heat
from the engine fuel burning, the water would ultimately evaporate. Likewise, at
extremely cold temperature conditions, the water inside would freeze into ice
therefore it would be unable to move.
Uses & Market Potential:

The major use of the engine Coolant to cool the engines by absorbing the heat that is
radiated by the car engines due to the exothermic reaction that takes place due to the
burning of the fuel. Depending on the engine type, few other additives are added to
the engine along with the Coolant.
The global Antifreeze/Coolant market is estimated at USD 5.4 Billion in 2020 and
is predicted to reach USD 5.9 Billion by 2025 at a CAGR of 1.8 %. The growth drive
is primarily influenced by the increasing demand for passenger cars as well as luxury
cars. Besides the increasing demand for vehicles in the market, there are other factors
that influence the market such as overall economic growth, the development in the
chemical industries, etc. The Indian market has emerged in this sector with a CAGR
of 6 % in the forecast period of 2019 – 2025. The automotive industry has grown
rapidly in India, as the demand for both passenger and commercial vehicles has
increased to 7.32% and 9.08% respectively over the last two years (2017-2018). This
increase in the sales of vehicle has significantly increased the demand for coolants
in the country.

Product:
Engine Coolant

Raw Material:
Basic raw material is Ethylene Glycol, Benzotriazole, Sodium Benzoate, Toyltriazole,
Sodium Molybdate, Triethanolamine, Phosphoric Acid, Antifoaming agent, Dyestuff and
Water.
Manufacturing Process:

Raw material procurement

Chemical Mixing

Adding Additives

Emulsion Forming

Centrifugation

Storage

Packaging

Area:

The industrial setup requires space for Inventory, workshop or manufacturing area, space
for power supply utilities and polishing area. Also, some of the area of building is
required for office staff facilities, office furniture, etc. Thus, the approximate total area
required for complete industrial setup is 1500-2000Sqft.
Cost of Machines:

Machine Unit Rate Price

Blending Tank 1 275000 275000
Centrifuge Machine 1 300000 300000

Jar Filling Machine 1 900000 900000

DM Water Plant 1 125000 125000

Storage Tank 1 75000 75000

Other equipment’s - - 50000

Total Amount 1725000

Power Requirement- The estimated Power requirement is taken at 30 HP.

Manpower Requirement– Following manpower is required:

 Machine operator-2
 Skilled/unskilled worker-3
 Helper-4
 Manager cum Accountant-1
 Sales Personnel-2

FINANCIALS
PROJECTED BALANCE SHEET

PARTICULARS I II III IV V

SOURCES OF FUND
Capital Account
Opening Balance - 3.48 5.17 7.53 10.79
Add: Additions 2.49 - - - -
Add: Net Profit 4.20 5.29 6.36 7.56 8.96
Less: Drawings 3.20 3.60 4.00 4.30 5.00
Closing Balance 3.48 5.17 7.53 10.79 14.75
CC Limit 6.40 6.40 6.40 6.40 6.40
Term Loan 14.20 10.65 7.10 3.55 -
Sundry Creditors 2.40 2.75 3.12 3.50 3.90

TOTAL : 26.48 24.97 24.15 24.24 25.05

APPLICATION OF FUND

Fixed Assets ( Gross) 17.75 17.75 17.75 17.75 17.75

Gross Dep. 2.64 4.88 6.79 8.42 9.80
Net Fixed Assets 15.11 12.87 10.96 9.33 7.95

Current Assets
Sundry Debtors 3.72 4.51 5.15 5.83 6.57
Stock in Hand 5.78 6.63 7.52 8.44 9.40
Cash and Bank 1.86 0.96 0.52 0.64 1.13

TOTAL : 26.48 24.97 24.15 24.24 25.05

- - - - -
PROJECTED PROFITABILITY STATEMENT

PARTICULARS I II III IV V

A) SALES
Gross Sale 79.80 96.66 110.45 124.83 140.71

Total (A) 79.80 96.66 110.45 124.83 140.71

B) COST OF SALES

Raw Material Consumed 48.00 55.08 62.42 70.03 77.93

Elecricity Expenses 2.69 3.02 3.36 3.69 4.03
Repair & Maintenance 2.00 2.42 2.76 3.12 3.52
Labour & Wages 12.35 14.82 17.48 20.28 23.12
Depreciation 2.64 2.24 1.91 1.63 1.38
Cost of Production 67.67 77.58 87.94 98.76 109.98

Add: Opening Stock /WIP - 3.38 3.88 4.40 4.94

Less: Closing Stock /WIP 3.38 3.88 4.40 4.94 5.50

Cost of Sales (B) 64.28 77.08 87.42 98.21 109.42

C) GROSS PROFIT (A-B) 15.52 19.58 23.03 26.62 31.29

19.45% 20.25% 20.85% 21.32% 22.24%
D) Bank Interest i) (Term Loan ) 1.73 1.42 1.03 0.63 0.24
ii) Interest On Working Capital 0.70 0.70 0.70 0.70 0.70
E) Salary to Staff 7.69 9.22 10.88 12.52 14.52
F) Selling & Adm Expenses Exp. 1.20 2.71 3.53 4.37 5.63

G) TOTAL (D+E+F) 11.32 14.05 16.15 18.22 21.09

H) NET PROFIT 4.20 5.53 6.88 8.39 10.20

5.3% 5.7% 6.2% 6.7% 7.2%
I) Taxation - 0.24 0.52 0.84 1.23

J) PROFIT (After Tax) 4.20 5.29 6.36 7.56 8.96

PROJECTED CASH FLOW STATEMENT

PARTICULARS I II III IV V

SOURCES OF FUND

Own Contribution 2.49 - - - -

Reserve & Surplus 4.20 5.53 6.88 8.39 10.20
Depriciation & Exp. W/off 2.64 2.24 1.91 1.63 1.38
Increase In Cash Credit 6.40 - - - -
Increase In Term Loan 15.98 - - - -
Increase in Creditors 2.40 0.35 0.37 0.38 0.39

TOTAL : 34.09 8.13 9.16 10.40 11.97

APPLICATION OF FUND

Increase in Fixed Assets 17.75 - - - -

Increase in Stock 5.78 0.85 0.88 0.92 0.96
Increase in Debtors 3.72 0.79 0.64 0.67 0.74
Repayment of Term Loan 1.78 3.55 3.55 3.55 3.55
Taxation - 0.24 0.52 0.84 1.23
Drawings 3.20 3.60 4.00 4.30 5.00
TOTAL : 32.23 9.03 9.60 10.28 11.48

Opening Cash & Bank Balance - 1.86 0.96 0.52 0.64

Add : Surplus 1.86 - 0.90 - 0.44 0.12 0.50

Closing Cash & Bank Balance 1.86 0.96 0.52 0.64 1.13
COMPUTATION OF CLOSING STOCK & WORKING CAPITAL

PARTICULARS I II III IV V

Finished Goods
(15 Days requirement) 3.38 3.88 4.40 4.94 5.50
Raw Material
(15 Days requirement) 2.40 2.75 3.12 3.50 3.90

Closing Stock 5.78 6.63 7.52 8.44 9.40

COMPUTATION OF WORKING CAPITAL REQUIREMENT

Particulars Amount Margin(10%) Net

Amount
Stock in Hand 5.78
Less:
Sundry Creditors 2.40
Paid Stock 3.38 0.34 3.04

Sundry Debtors 3.72 0.37 3.35

Working Capital Requirement 6.40

Margin 0.71

MPBF 6.40
Working Capital Demand 6.40
REPAYMENT SCHEDULE OF TERM LOAN 11.0%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

I Opening Balance
Ist Quarter - 15.98 15.98 0.44 - 15.98
Iind Quarter 15.98 - 15.98 0.44 - 15.98
IIIrd Quarter 15.98 - 15.98 0.44 0.89 15.09
Ivth Quarter 15.09 - 15.09 0.41 0.89 14.20
1.73 1.78
II Opening Balance
Ist Quarter 14.20 - 14.20 0.39 0.89 13.31
Iind Quarter 13.31 - 13.31 0.37 0.89 12.43
IIIrd Quarter 12.43 - 12.43 0.34 0.89 11.54
Ivth Quarter 11.54 11.54 0.32 0.89 10.65
1.42 3.55
III Opening Balance
Ist Quarter 10.65 - 10.65 0.29 0.89 9.76
Iind Quarter 9.76 - 9.76 0.27 0.89 8.88
IIIrd Quarter 8.88 - 8.88 0.24 0.89 7.99
Ivth Quarter 7.99 7.99 0.22 0.89 7.10
1.03 3.55
IV Opening Balance
Ist Quarter 7.10 - 7.10 0.20 0.89 6.21
Iind Quarter 6.21 - 6.21 0.17 0.89 5.33
IIIrd Quarter 5.33 - 5.33 0.15 0.89 4.44
Ivth Quarter 4.44 4.44 0.12 0.89 3.55
0.63 3.55
V Opening Balance
Ist Quarter 3.55 - 3.55 0.10 0.89 2.66
Iind Quarter 2.66 - 2.66 0.07 0.89 1.78
IIIrd Quarter 1.78 - 1.78 0.05 0.89 0.89
Ivth Quarter 0.89 0.89 0.02 0.89 0.00
0.24 3.55

Door to Door Period 60 Months

Moratorium Period 6 Months
Repayment Period 54 Months
CALCULATION OF D.S.C.R
PARTICULARS I II III IV V

CASH ACCRUALS 6.84 7.53 8.27 9.18 10.35

Interest on Term Loan 1.73 1.42 1.03 0.63 0.24

Total 8.57 8.95 9.29 9.82 10.59

REPAYMENT
Repayment of Term Loan 1.78 3.55 3.55 3.55 3.55
Interest on Term Loan 1.73 1.42 1.03 0.63 0.24

Total 3.51 4.97 4.58 4.18 3.79

DEBT SERVICE COVERAGE RATIO 2.44 1.80 2.03 2.35 2.79

AVERAGE D.S.C.R. 2.25

Assumptions:
1. Production Capacity of Engine Coolant Manufacturing unit is taken at 500 Ltr.
per day. First year, Capacity has been taken @ 40%.

2. Working shift of 10 hours per day has been considered.

3. Raw Material stock and Finished goods closing stock has been taken for 15
days.

4. Credit period to Sundry Debtors has been given for 14 days.

5. Credit period by the Sundry Creditors has been provided for 15 days.

6. Depreciation and Income tax has been taken as per the Income tax Act,1961.

7. Interest on working Capital Loan and Term loan has been taken at 11%.

8. Salary and wages rates are taken as per the Current Market Scenario.

9. Power Consumption has been taken at 30 HP.

10. Selling Prices & Raw material costing has been increased by 3% & 2%
respectively in the subsequent years.
 DISCLAIMER

The views expressed in this Project Report are advisory in nature. SAMADHAN
assume no financial liability to anyone using the content for any purpose. All the
materials and content contained in Project report is for educational purpose and
reflect the views of the industry which are drawn from various research material
sources from internet, experts, suppliers and various other sources. The actual
cost of the project or industry will have to be taken on case to case basis
considering specific requirement of the project, capacity and type of plant and
other specific factors/cost directly related to the implementation of project. It is
intended for general guidance only and must not be considered a substitute for a
competent legal advice provided by a licensed industry professional. SAMADHAN
hereby disclaims any and all liability to any party for any direct, indirect, implied,
punitive, special, incidental or other consequential damages arising directly or
indirectly from any use of the Project Report Content, which is provided as is, and
without warranties.