DETAILED PROJECT REPORT ON AUTO LOOM / …

1 DETAILED PROJECT REPORT ON auto loom / RAPIER loom (4 Nos) ( solapur TEXTILE cluster ) Bureau of Energy Efficiency Prepared By Reviewed By auto loom /RAPIER loom (4 Nos.) solapur TEXTILE cluster BEE, 2010 DETAILED PROJECT REPORT on auto loom /Rapier loom (4 Nos) Textile SME cluster , solapur , Maharashtra (India) New Delhi: Bureau of Energy Efficiency; Detail PROJECT REPORT No. SLP/TXT/AL4/12 For more information Bureau of Energy Efficiency (BEE) (Ministry of Power, Government of India) 4th Floor, Sewa Bhawan R. K. Puram, New Delhi 110066 Telephone +91-11-26179699 Fax +91-11-26178352 Websites: Email: Acknowledgement We are sincerely thankful to the Bureau of Energy Efficiency, Ministry of Power, for giving us the opportunity to implement the BEE SME PROJECT in solapur Textile cluster , solapur .

2 We express our sincere gratitude to all concerned officials for their support and guidance during the conduct of this exercise. Dr. Ajay Mathur, Director General, BEE Smt. Abha Shukla, Secretary, BEE Shri Jitendra Sood, Energy Economist, BEE Shri Pawan Kumar Tiwari, Advisor (SME), BEE Shri Rajeev Yadav, PROJECT Economist, BEE Zenith Energy Services Pvt. Ltd.(ZESPL) is also thankful to Shri Murlidhar Arkal, Chairman, Shri Srinivas Bura, Vice President, Shri Jayanth Aken, Secretary, Textile Development Foundation, solapur for their valuable inputs, co-operation, support and identification of the units for energy use and technology audit studies and facilitating the implementation of BEE SME program in solapur Textile cluster . We take this opportunity to express our appreciation for the excellent support provided by Textile Unit Owners, Local Service Providers, and Equipment Suppliers for their active involvement and their valuable inputs in making the program successful and in completion of the DETAILED PROJECT REPORT (DPR).

3 ZESPL is also thankful to all the SME owners, plant in charges and all workers of the SME units for their support during the energy use and technology audit studies and in implementation of the PROJECT objectives. Zenith Energy Services Pvt. Ltd. Hyderabad Contents List of Annexure vii List of Tables vii List of Figures viii List of Abbreviation viii Executive summary ix About BEE S SME program x 1 INTRODUCTION .. 1 About the solapur textile cluster .. 1 Energy performance in 4 Specific energy consumption of final product .. 4 Proposed equipment to be upgrade .. 4 Description of existing equipment .. 4 Role in process .. 5 Baseline for existing equipment.

4 5 Design and operating parameter .. 5 Production cost per kg of final product .. 5 2 PROPOSED ENERGY EFFICIENT EQUIPMENT .. 7 Detail description of technology .. 7 Description of equipment .. 7 Availability of equipment .. 9 Service/equipment providers .. 9 Technology/equipment specification .. 10 Justification of technology selected and suitability .. 11 Superiority over existing system .. 11 Life cycle assesment and risk analysis .. 12 Suitable unit for implementation of proposed 12 3 ECONOMIC BENEFITS OF PROPOSED EUIPMENT .. 14 Technical benefits .. 14 Fuel saving .. 14 Electricity saving .. 14 Social benefits .. 15 Improvement in working environment .. 15 Improvement in skill set of workers .. 15 Impact on wages/emoluments .. 15 Envirinmental benefit.

5 15 Reduction in effluent generation .. 15 Reduction in GHG emission such as CO2, NOx, etc .. 15 Reduction in other emissions like Sox .. 15 4 INSTALLATION OF PROPOSED EQUIPMENT .. 16 Cost of equipment implementation .. 16 Cost of equipment .. 16 Other costs .. 16 Arrangement of funds .. 16 Entrepreneur s contribution .. 16 Loan amount .. 16 Terms & conditions of 16 Financial indicators .. 17 Cash flow analysis .. 17 Simple payback period .. 17 Net Present Value (NPV) .. 17 Internal rate of return (IRR) .. 17 Return on investment (ROI) .. 17 Sensitivity analysis .. 17 Procurement and Implementation schedule .. 18 vii List of Annexure Annexure 1 Establishment of baseline and monetary 19 Annexure 2 Process flow diagram .. 20 Annexure 2 Process flow diagram.

6 20 Annexure 3 Technology assessment REPORT .. 21 Annexure 4 DETAILED financial analysis of Rapier loom (4 nos) .. 22 Annexure 5 Details of procurement and implementation plan .. 26 Annexure 6 Details of equipment and service provider .. 27 Annexure 7 Quotations of proposed equipment .. 28 List of Tables Table Details of annual energy consumption of a typical unit .. 1 Table production cost by power loom machine .. 5 Table Benefits of Rapier loom over conventional power loom .. 10 Table specification of power loom for suitable machine .. 10 Table Energy and cost benefit of rapier loom .. 14 Table Details of PROJECT cost .. 16 Table Financial indicator of PROJECT .. 17 Table Sensitivity analysis in different scenario .. 18 viii List of Figures Figure Process flow chart of typical textile unit.

7 3 Figure Rapier loom .. 7 List of Abbreviations kWh kilo Watt Hour SME Small and Medium Enterprises GHG Green House Gas BEE Bureau of Energy Efficiency DPR DETAILED PROJECT REPORT O&M Operational & Maintenance NPV Net Present Values ROI Return on Investment IRR Internal Rate of Return DSCR Debt Service Coverage Ratio PBT Profit Before Tax PAT Profit After Tax MoMSME Ministry of Micro Small and Medium Enterpries SIDBI Small Industries Development of India ix EXECUTIVE SUMMARY Zenith Energy Services Pvt. Ltd is executing BEE-SME program in solapur textile cluster , supported by Bureau of Energy Efficiency (BEE) with an overall objective of improving the energy efficiency in cluster units. solapur textile cluster is one of the largest textile clusters in India; accordingly this cluster was chosen for energy efficiency improvements by implementing energy efficient measures/technologies, so as to facilitate maximum replication in other textile clusters in India.

8 The main energy forms used in the cluster units are electricity and fuel such as wood and other biomass product. Electricity is mostly used in power looms, winding machines, doubling machines, warping machines, hang dyeing machine, blowers, hydro extractor, small pumps and lighting. Retrofitting of power looms with rapier/ auto looms will reduces the power consumption & production cost and also increases the rate of production. PROJECT implementation installation of four rapier/ auto loom in place of sixteen conventional power loom will lead to reduction in electricity consumption by 19200 (4800 x 4) kWh per annum however; this intervention will not have any effect on the existing consumption pattern of fuel. This bankable DPR also found eligible for subsidy scheme of MoMSME for Technology and Quality Upgradation Support to Micro, Small and Medium Enterprises under National Manufacturing and Competitiveness Programme.

9 The key indicators of the DPR including the PROJECT cost, debt equity ratio, monetary benefit and other necessary parameters are given in table: Particular Unit Value 1 PROJECT cost `(in lakh) 2 Electricity saving kWh / year 19200 3 Monetary benefit (Due to increase in productivity, electrical saving, improvement in product quality and reduction in man power cost) `(in lakh) 4 Debit equity ratio ratio 3:1 5 Simple payback period years 6 NPV `(in lakh) 7 IRR %age 8 ROI %age 9 DSCR ratio 10 Process down time day 10 x The projected profitability and cash flow statements indicate that the PROJECT implementation will be financially viable and technically feasible xi ABOUT BEE S SME PROGRAM Bureau of Energy Efficiency (BEE) is implementing a BEE-SME Programme to improve the energy performance in 25 selected SMEs clusters.

10 solapur Textile cluster is one of them. The BEE s SME Programme intends to enhance the energy efficiency awareness by funding / subsidizing need based studies in SME clusters and giving energy conservation recommendations. For addressing the specific problems of these SMEs and enhancing energy efficiency in the clusters, BEE will be focusing on energy efficiency, energy conservation and technology up-gradation through studies and pilot projects in these SMEs clusters. Major activities in the BEE -SME program are furnished below: Energy use and technology audit The energy use technology studies would provide information on technology status, best operating practices, gaps in skills and knowledge on energy conservation opportunities, energy saving potential and new energy efficient technologies, etc for each of the sub sector in SMEs.