Detailed Project Report
Suede Leather Tanning Unit
—
Prepared on: 13 November 2026 · Prepared with Building Business DPR (buildingbusiness.in)
01 Project at a glance
- Total project cost
- ₹25.20 L
- Term loan from bank
- ₹22.68 L
- Promoter’s contribution
- ₹2.52 L
- Sales · Year 3
- ₹0.00 L
- Profit after tax · Year 3
- ₹-7.98 L
- Average DSCR
- -0.78
- Break-even (% of capacity used)
- —
02 Promoter and unit
| Promoter name | — |
|---|---|
| Business / firm name | — |
| Legal form | Proprietorship |
| Address of the unit | — |
| Applicant category | General · Rural |
03 The project
Tan wet-salted cow hides into soft suede leather for shoes, garments and fancy goods.
| Main product or service | Suede Leather Tanning Unit |
|---|---|
| Installed capacity per year (at 100%) | 10,000 units |
04 Market
- Footwear makers (shoe uppers)
- Leather garment makers
- Fancy leather goods makers
- Leather exporters
- Direct supply to footwear and garment units
- Leather traders in tannery clusters
- Export orders
05 Plant and machinery
| Item | Qty | ₹ | Total ₹ |
|---|---|---|---|
| Wooden paddle with motor and starter (10 HP), 8'×7' (× 2) | 1 | 2,00,000 | 2,00,000 |
| Tanning drum with motor and starter (10 HP), 8×7 (× 2) | 1 | 3,00,000 | 3,00,000 |
| Fleshing machine (15 HP), 1800 mm | 1 | 2,00,000 | 2,00,000 |
| Experimental drum (5 HP) | 1 | 50,000 | 50,000 |
| Double-width shaving machine, 1800 mm | 1 | 4,00,000 | 4,00,000 |
| Dyeing and fat-liquoring drum (10 HP) plus one dry drum (× 2) | 1 | 3,00,000 | 3,00,000 |
| Staking machine | 1 | 1,00,000 | 1,00,000 |
| Toggle chamber, 10 plates | 1 | 1,00,000 | 1,00,000 |
| Measuring machine, 1800 mm | 1 | 2,00,000 | 2,00,000 |
| Generator set | 1 | 2,00,000 | 2,00,000 |
| Buffing machine | 1 | 1,00,000 | 1,00,000 |
| Primary effluent treatment plant | 1 | 2,50,000 | 2,50,000 |
| Total | 24,00,000 |
Pre-filled from: DC-MSME project profile — Suede Leather (SISI Kanpur, PMRY series); World Customs Organization – HS Nomenclature 2022, Chapter 41. Prices in older reports will have gone up — enter today’s quotations.
06 Raw materials
- Wet-salted cow hides (hair-slip quality) — 5,000 pieces a month at ₹20 per sq ft; the profile says they are available locally in Kanpur
- Tanning and finishing chemicals (sodium sulphide, lime, ammonium sulphate, chrome salt, wattle extract, acid dyes, fat liquors) — ₹6 per sq ft — ₹7.50 L a month
07 Cost of project
| ₹ in lakh | |
|---|---|
| Plant and machinery | 24.00 |
| Contingency | 1.20 |
| Total fixed capital | 25.20 |
| Working capital margin | 0.00 |
| Total project cost | 25.20 |
08 Means of finance
| ₹ in lakh | % | |
|---|---|---|
| Promoter’s contribution | 2.52 | 10.0 |
| Term loan from bank | 22.68 | 90.0 |
| Total | 25.20 | 100.0 |
| Working capital loan (outside project cost) | 0.00 |
09 Key assumptions
| Selling price | ₹0 per units |
|---|---|
| Raw material & packing cost | ₹0 per units |
| Capacity used each year | 60% · 70% · 80% · 80% · 80% · 80% · 80% |
| Term loan interest rate (% a year) | 11% · 84 months (Moratorium 6) |
| Working capital method | Turnover method (RBI) · Working capital interest (% a year) 11% |
| Income tax rate | 25% |
| Yearly price and cost rise | 0% |
10 Production and sales
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capacity used | 60% | 70% | 80% | 80% | 80% | 80% | 80% |
| Production (units) | 6,000 | 7,000 | 8,000 | 8,000 | 8,000 | 8,000 | 8,000 |
| Sales | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
11 Projected profitability
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Sales | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Raw material and packing | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Power and fuel | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Salaries and wages | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 |
| Rent | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Administration | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Selling and distribution | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Repairs and maintenance | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 |
| Insurance | 0.13 | 0.13 | 0.13 | 0.13 | 0.13 | 0.13 | 0.13 |
| Total cost of operations | 3.51 | 3.51 | 3.51 | 3.51 | 3.51 | 3.51 | 3.51 |
| Operating profit (EBITDA) | -3.51 | -3.51 | -3.51 | -3.51 | -3.51 | -3.51 | -3.51 |
| Depreciation | 3.78 | 3.21 | 2.73 | 2.32 | 1.97 | 1.68 | 1.43 |
| Preliminary expenses written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Interest on term loan | 2.45 | 2.13 | 1.74 | 1.36 | 0.98 | 0.59 | 0.21 |
| Interest on working capital | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit before tax | -9.74 | -8.85 | -7.98 | -7.19 | -6.46 | -5.78 | -5.14 |
| Income tax | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit after tax | -9.74 | -8.85 | -7.98 | -7.19 | -6.46 | -5.78 | -5.14 |
12 Cash flow
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Profit after tax | -9.74 | -8.85 | -7.98 | -7.19 | -6.46 | -5.78 | -5.14 |
| Depreciation | 3.78 | 3.21 | 2.73 | 2.32 | 1.97 | 1.68 | 1.43 |
| Cash accruals (PAT + depreciation) | -5.96 | -5.64 | -5.25 | -4.87 | -4.49 | -4.10 | -3.72 |
| Term loan repaid | 1.74 | 3.49 | 3.49 | 3.49 | 3.49 | 3.49 | 3.49 |
| Owner’s drawings | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Surplus after repayment | -7.71 | -9.13 | -8.74 | -8.36 | -7.97 | -7.59 | -7.21 |
| Cash and bank | -7.71 | -16.84 | -25.58 | -33.94 | -41.91 | -49.50 | -56.71 |
13 Projected balance sheet
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capital (own + subsidy) | 2.52 | 2.52 | 2.52 | 2.52 | 2.52 | 2.52 | 2.52 |
| Reserves and surplus | -9.74 | -18.59 | -26.58 | -33.77 | -40.23 | -46.01 | -51.15 |
| Term loan outstanding | 20.94 | 17.45 | 13.96 | 10.47 | 6.98 | 3.49 | 0.00 |
| Working capital loan | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total liabilities | 13.71 | 1.37 | -10.10 | -20.78 | -30.73 | -40.00 | -48.63 |
| Net fixed assets | 21.42 | 18.21 | 15.48 | 13.15 | 11.18 | 9.50 | 8.08 |
| Preliminary expenses not written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Current assets (stock and debtors) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Cash and bank | -7.71 | -16.84 | -25.58 | -33.94 | -41.91 | -49.50 | -56.71 |
| Total assets | 13.71 | 1.37 | -10.10 | -20.78 | -30.73 | -40.00 | -48.63 |
14 Ratios and break-even
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Debt service coverage ratio (DSCR) | -0.84 | -0.62 | -0.67 | -0.72 | -0.79 | -0.86 | -0.95 |
| Break-even (% of capacity used) | — | — | — | — | — | — | — |
| Cash break-even | — | — | — | — | — | — | — |
| Average DSCR | -0.78 |
|---|---|
| Lowest DSCR | -0.95 |
| Payback period | — |
15 Depreciation
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Depreciation | 3.78 | 3.21 | 2.73 | 2.32 | 1.97 | 1.68 | 1.43 |
Written-down value method at Income-tax Rules block rates (building 10%, plant & machinery 15%, furniture 10%, computers 40%). Change them if your CA uses other rates.
16 Term loan repayment
| Year | Opening | Interest | Term loan repaid | Closing |
|---|---|---|---|---|
| 1 | 22.68 | 2.45 | 1.74 | 20.94 |
| 2 | 20.94 | 2.13 | 3.49 | 17.45 |
| 3 | 17.45 | 1.74 | 3.49 | 13.96 |
| 4 | 13.96 | 1.36 | 3.49 | 10.47 |
| 5 | 10.47 | 0.98 | 3.49 | 6.98 |
| 6 | 6.98 | 0.59 | 3.49 | 3.49 |
| 7 | 3.49 | 0.21 | 3.49 | 0.00 |
17 Licences and registrations
- Udyam registration
- GST registration
- State Pollution Control Board consent to establish and operate (tanning is Red category)
- Membership of the common effluent treatment plant where your cluster has one
- Factory licence (the unit employs more than the Factories Act limit)
- Import Export Code (IEC) if you export
18 Government schemes that may apply
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
19 Sources
- DC-MSME project profile — Suede Leather (SISI Kanpur, PMRY series) — https://www.dcmsme.gov.in/publications/pmryprof/leather/ch23.pdf
- World Customs Organization – HS Nomenclature 2022, Chapter 41 — https://www.wcoomd.org/-/media/wco/public/global/pdf/topics/nomenclature/instruments-and-tools/hs-nomenclature-2022/2022/0841_2022e.pdf
This report is a projection from the figures entered by the promoter. It is not a bank appraisal or a guarantee of a loan or subsidy. Check every figure with current quotations and your chartered accountant before submitting it.