§1What this business is
A steel chamber is made from MS sheet and channels, lined first with fire-clay bricks for insulation and then with refractory bricks. Kanthal resistance wire is laid in grooves in the lining, the terminals are brought out and insulated, and a control panel with thermostats and thermocouples is fitted. Each furnace is built to the customer's size and temperature and tested to IS 9025 and IS 8506. Induction and arc furnaces are outside this profile.
Capacity: 48 furnaces of 50 kW a year (4 a month), worth ₹76.80 L at ₹1.60 L each.
§2Is it right for you?
Who it is for
An electrical or mechanical engineer who knows industrial heating and has factory contacts.
Who it is not for
Someone without engineering training; a badly built furnace is a fire and safety risk.
Advantages
- Industrial buyers pay well for a working furnace
- Made to order, so little unsold stock
- Demand growing about 10% a year (profile)
- Repair and re-lining work after sale
Drawbacks
- Each order is a custom design
- Only 15–20 units in Kerala and Tamil Nadu then, so buyers compare closely
- Big-ticket sales; a few lost orders hurt
- Needs engineering skill in heat and controls
Skills you need
- Furnace design and heat calculations
- Refractory lining and element fitting
- Temperature control panels
- Selling to factories and labs
Why difficulty 4/5: Custom engineering for industrial buyers who expect reliability.
§3Market
Who buys
- Engineering industries (heat treatment)
- Food processing industries
- Chemical processing industries
- Laboratories
How it sells
- Direct orders from factories
- Referrals and industrial fairs
Good to know
- The profile puts demand growth at about 10% a year, with 15–20 small units then making furnaces in Kerala and Tamil Nadu.
- Size, maximum temperature and level of automatic control are set by each customer.
§4Raw material & machinery
| Item | Qty | Cost |
|---|---|---|
| Power press | 1 | ₹50,000 |
| Drilling machine, 2" capacity | 2 | ₹36,000 |
| Shearing machine, 1200 mm | 1 | ₹30,000 |
| Bending press | 1 | ₹26,000 |
| Spring coil winding machine | 1 | ₹26,000 |
| Arc welding set | 1 | ₹25,000 |
| Double-ended grinder 200 mm, 2 HP | 2 | ₹20,000 |
| Air compressor with spray painting; chain pulley block 5 t; flexible grinder | 1 each | ₹48,000 |
| Testing: HV tester, digital micro-ohm meter, pyrometer, thermocouple test set, ammeters, voltmeters, wattmeters, multimeter, anemometer | 1 lot | ₹60,000 |
From: DC-MSME project profile — Electric Furnace (2003)
- Refractory bricks₹1,10,000 a month
- Control panel assembly4 a month at ₹26,000 = ₹1,04,000
- Fire-clay bricks5,100 a month at ₹16 = ₹81,600
- Kanthal resistance wire8 kg a month at ₹4,000/kg = ₹32,000
- MS sheet (18 gauge) and MS channel1,300 kg + 450 kg a month = ₹38,050
- Thermocouples, thermostats, compensating cable₹19,375 a month
- Fire clay, paint, bolts, nuts, welding rods₹11,200 a month
From: DC-MSME project profile — Electric Furnace (2003)
Suppliers in Building Business Bazaar
Meco Instruments Private Limited · Mumbai →Ashok Bricks and Clay Products · Kozhikode →Chalakkudy Refractors Ltd · Thrissur →India Machine Tools Co · Kozhikode →Kantilal Chunilal and Sons Appliances Pvt. Ltd · Surat →Kirloskar Electric Co. Ltd · Bengaluru →MPS Steel Industries Kerala Ltd · Kozhikode →Olivine Industries · Kochi →Parksons Engineering Corpn · Mumbai →Pipes and Refractories of India · Kozhikode →Ruia Enterprises · Mumbai →Steel Authority of India Ltd · Chennai →
§5Licences & registration
- Udyam registration
- GST
- Trade licence from the local body
- State Pollution Control Board consent (welding and painting)
§6Schemes & subsidies
- PMEGPCentralActive15–35% subsidy
- MudraCentralActiveLoan up to ₹20 lakh, no collateral
- CGTMSECentralActiveNo collateral, up to ₹10 crore
- Stand-Up IndiaCentralClosed₹10 lakh – ₹1 crore loan
The ₹19.52 L project fits PMEGP, MUDRA (Tarun, up to ₹20 L), CGTMSE and Stand-Up India.
§7Money
How the investment is worked out: DC-MSME profile: machinery ₹2.61 L (power press ₹50,000, 2 drilling machines ₹36,000, shearing machine ₹30,000, bending press ₹26,000, spring coil winder ₹26,000, arc welding set ₹25,000 and more) + testing equipment ₹60,000 + electrification ₹32,100 + furniture ₹40,000 + tools and jigs ₹20,000 = fixed capital ₹4.23 L; working capital for 3 months ₹15.29 L; total ₹19.52 L. Premises rented.
Working capital: Working capital for 3 months ₹15.29 L; monthly spend ₹5.10 L, of which bricks and fire clay ₹1.95 L and control panels ₹1.04 L.
Prices from 2002–03 — machinery, material and wage costs will be much higher now.
§8Export potential
Confirm the HS code in the DGFT ITC(HS) lookup before you export
Export council / board: EEPC India
- Confirm the 8-digit ITC(HS) line with DGFT or your customs broker before shipping.
- You need an Import Export Code (IEC) from DGFT before the first shipment.
§9Risks — where people fail
- Order gaps between big jobs
- Warranty claims for elements and lining
- Competition from established furnace makers
- Price rise of refractory bricks and Kanthal wire
§1030 / 60 / 90-day plan
A general plan that applies to any business. A plan for this business will be added after research.
- Days 1–30: Visit a working electric resistance furnace manufacturing unit, ask 10 buyers about price and quantity, and get quotations from 3 suppliers.
- Days 31–60: Udyam and the licences you need (Udyam registration, GST), a project report (DPR), and the scheme or loan file.
- Days 61–90: Space and machines, trial production, and first deliveries to 10 customers.
§11Who to connect with
Associations, clusters and training institutes — the directory is being built. Connect
§12Watch
There is no episode on this business yet. Shows are coming soon on the Podcast page.
Want to start Electric Resistance Furnace Manufacturing?
DPR, loan file or registration — ask us on WhatsApp.
¶Sources
Data review: 6 October 2026. Spotted a mistake? Report it. For information only — not legal or financial advice.