Detailed Project Report
Wet Blue (Chrome-Tanned) Leather Tannery
—
Prepared on: 13 November 2026 · Prepared with Building Business DPR (buildingbusiness.in)
01 Project at a glance
- Total project cost
- ₹41.48 L
- Term loan from bank
- ₹37.33 L
- Promoter’s contribution
- ₹4.15 L
- Sales · Year 3
- ₹0.00 L
- Profit after tax · Year 3
- ₹-11.28 L
- Average DSCR
- -0.53
- 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
Soak, lime and chrome-tan raw hides into wet blue — the half-way leather that finishing tanneries buy and turn into shoe, bag and garment leather.
| Main product or service | Wet Blue (Chrome-Tanned) Leather Tannery |
|---|---|
| Installed capacity per year (at 100%) | 10,000 units |
04 Market
- Leather dyeing and finishing units
- Finished-leather tanneries making shoe-upper, garment and goods leather
- Leather traders in tannery clusters
- Direct sale to finishing tanneries in clusters such as Kanpur–Unnao, Ranipet–Ambur, Kolkata and Jalandhar
- Sale through leather merchants and agents
05 Plant and machinery
| Item | Qty | ₹ | Total ₹ |
|---|---|---|---|
| Wooden paddle with 7.5 HP motor and starter, vat size 8 ft × 7 ft (× 2) | 1 | 6,00,000 | 6,00,000 |
| Fleshing machine, 1,800 mm, with 15 HP motor and starter | 1 | 6,00,000 | 6,00,000 |
| Wooden tanning drums, 8 ft × 8 ft, with 10 HP motor and starter (× 4) | 1 | 14,00,000 | 14,00,000 |
| Experimental drum with 5 HP motor and starter | 1 | 1,50,000 | 1,50,000 |
| Platform weighing balance | 1 | 1,50,000 | 1,50,000 |
| Generator, 25 kW | 1 | 4,50,000 | 4,50,000 |
| Trolleys, tools and equipment | 1 | 2,00,000 | 2,00,000 |
| Boring, pump and overhead tank (listed under building) | 1 | 4,00,000 | 4,00,000 |
| Total | 39,50,000 |
Pre-filled from: DC-MSME import-substitution DPR — Chrome Tanned Leather. Prices in older reports will have gone up — enter today’s quotations.
06 Raw materials
- Wet-salted hides — 5,000 a month at ₹1,200 each (₹60,00,000). The DPR calls them cow hides in one place and buff (buffalo) hides in another.
- Tanning chemicals — basic chromium sulphate, lime, sodium sulphide, ammonium salts, salt, acid, sodium bicarbonate — ₹6 a sq ft on 1,25,000 sq ft a month (₹7,50,000)
07 Cost of project
| ₹ in lakh | |
|---|---|
| Plant and machinery | 39.50 |
| Contingency | 1.98 |
| Total fixed capital | 41.48 |
| Working capital margin | 0.00 |
| Total project cost | 41.48 |
08 Means of finance
| ₹ in lakh | % | |
|---|---|---|
| Promoter’s contribution | 4.15 | 10.0 |
| Term loan from bank | 37.33 | 90.0 |
| Total | 41.48 | 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 | 0.83 | 0.83 | 0.83 | 0.83 | 0.83 | 0.83 | 0.83 |
| Insurance | 0.21 | 0.21 | 0.21 | 0.21 | 0.21 | 0.21 | 0.21 |
| Total cost of operations | 3.92 | 3.92 | 3.92 | 3.92 | 3.92 | 3.92 | 3.92 |
| Operating profit (EBITDA) | -3.92 | -3.92 | -3.92 | -3.92 | -3.92 | -3.92 | -3.92 |
| Depreciation | 6.22 | 5.29 | 4.49 | 3.82 | 3.25 | 2.76 | 2.35 |
| Preliminary expenses written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Interest on term loan | 4.04 | 3.50 | 2.87 | 2.24 | 1.61 | 0.97 | 0.34 |
| Interest on working capital | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit before tax | -14.18 | -12.71 | -11.28 | -9.97 | -8.77 | -7.65 | -6.61 |
| Income tax | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit after tax | -14.18 | -12.71 | -11.28 | -9.97 | -8.77 | -7.65 | -6.61 |
12 Cash flow
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Profit after tax | -14.18 | -12.71 | -11.28 | -9.97 | -8.77 | -7.65 | -6.61 |
| Depreciation | 6.22 | 5.29 | 4.49 | 3.82 | 3.25 | 2.76 | 2.35 |
| Cash accruals (PAT + depreciation) | -7.96 | -7.42 | -6.79 | -6.15 | -5.52 | -4.89 | -4.26 |
| Term loan repaid | 2.87 | 5.74 | 5.74 | 5.74 | 5.74 | 5.74 | 5.74 |
| Owner’s drawings | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Surplus after repayment | -10.83 | -13.16 | -12.53 | -11.90 | -11.27 | -10.63 | -10.00 |
| Cash and bank | -10.83 | -23.99 | -36.52 | -48.41 | -59.68 | -70.31 | -80.31 |
13 Projected balance sheet
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capital (own + subsidy) | 4.15 | 4.15 | 4.15 | 4.15 | 4.15 | 4.15 | 4.15 |
| Reserves and surplus | -14.18 | -26.88 | -38.16 | -48.14 | -56.91 | -64.56 | -71.17 |
| Term loan outstanding | 34.46 | 28.71 | 22.97 | 17.23 | 11.49 | 5.74 | 0.00 |
| Working capital loan | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total liabilities | 24.43 | 5.98 | -11.05 | -26.76 | -41.28 | -54.67 | -67.02 |
| Net fixed assets | 35.25 | 29.97 | 25.47 | 21.65 | 18.40 | 15.64 | 13.30 |
| 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 | -10.83 | -23.99 | -36.52 | -48.41 | -59.68 | -70.31 | -80.31 |
| Total assets | 24.43 | 5.98 | -11.05 | -26.76 | -41.28 | -54.67 | -67.02 |
14 Ratios and break-even
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Debt service coverage ratio (DSCR) | -0.57 | -0.42 | -0.45 | -0.49 | -0.53 | -0.58 | -0.64 |
| Break-even (% of capacity used) | — | — | — | — | — | — | — |
| Cash break-even | — | — | — | — | — | — | — |
| Average DSCR | -0.53 |
|---|---|
| Lowest DSCR | -0.64 |
| Payback period | — |
15 Depreciation
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Depreciation | 6.22 | 5.29 | 4.49 | 3.82 | 3.25 | 2.76 | 2.35 |
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 | 37.33 | 4.04 | 2.87 | 34.46 |
| 2 | 34.46 | 3.50 | 5.74 | 28.71 |
| 3 | 28.71 | 2.87 | 5.74 | 22.97 |
| 4 | 22.97 | 2.24 | 5.74 | 17.23 |
| 5 | 17.23 | 1.61 | 5.74 | 11.49 |
| 6 | 11.49 | 0.97 | 5.74 | 5.74 |
| 7 | 5.74 | 0.34 | 5.74 | 0.00 |
17 Licences and registrations
- Udyam registration
- GST registration
- Factory licence
- State Pollution Control Board consent to establish and to operate (the DPR calls pollution clearance mandatory)
- Membership of a common effluent treatment plant, or your own ETP
- Hazardous waste authorisation for chrome-bearing sludge
18 Government schemes that may apply
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
19 Sources
- DC-MSME import-substitution DPR — Chrome Tanned Leather — https://dcmsme.gov.in/26_chrome_tanned_leather%20by%20TR%20Sharma.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.