INTRODUCTION
Pottery has been an iconic part of Indian culture throughout history. Potteries were always in demand for their storage, decor, and utility factors. The pottery industry is highly decentralized and the capital required is low. The raw materials are readily available in the market in the local areas. The supply chain of the pottery products is easy to manage as they can be stored in the entrepreneur’s workspaces and sold whenever required.
MARKET POTENTIAL
The per capita consumption of pottery products in India has risen to over 30% more than what it was six years ago. It is leading to a growing demand for pottery products, both in rural and Urban India. Thus, it is an easy and attractive proposition to start a pottery business. The pottery business also holds incredible export potential. India exported pottery worth INR 740 million in 2019-20 to more than 140 countries1. Moreover, the Government of India, through various schemes such as SFURTI, is allocating over INR 500 million to promote terracotta and red clay pottery. The Indian pottery business was valued at 276 billion in 2019 and is projected to reach INR 530 billion in five years, growing at a CAGR of 8.6% from 2020 to 20272.
FUNDING SOURCE
Under the programmes supported by the Development Alternatives Group, such enterprises have been
financed by Sankalp Swashakti Mahila Mandal (a Cluster Level Federation) through a micro-credit
facility, with an average loan size of INR 10,000.
BUSINESS ECONOMICS
FIXED CAPITAL (One Time Expenditure)
| MACHINERY & EQUIPMENT | AMOUNT (INR) |
| Electric wheel (2 @ INR 25,000) | 25,000 |
| Kiln | 12,000 |
| Modelling tool | 2000 |
WORKING CAPITAL (for a 2-month cycle)
| RAW MATERIALS | AMOUNT (INR) |
| Clay (5.2 tonnes @ INR 2,000/tonne) | 10,400 |
| Potter’s Thread (60m @ INR 10/metre) | 600 |
| Firewood ( 260 kg @ INR 10/kg) | 2600 |
| STAFF AND LABOUR | AMOUNT ( IN INR) |
| Entrepreneur’s Salary (@ INR 10,000/month) | 20,000 |
| UTILITIES & OTHER EXPENSES | AMOUNT (in INR) |
| Rent (@ INR 10,000/month) | 20,000 |
| Electricity | 2000 |
| Water | 2000 |
| Total | 57,600 |
FINANCIAL SUMMARY (Annual)
| FINANCIALS | AMOUNT(INR) |
| Fixed Cost | 64,000 |
| Working Capital (for each cycle of 2 months duration) | 57,600 |
| Total Enterprise Cost | 1,21,600 |
| Annual Revenue | 7,80,000 |
| Total Expenditure (annual working capital) | 3,45,600 |
| Enterprise Profit | 4,34,400 |
| Payback Period (in months) | 2 |
BASIC ASSUMPTIONS
- Working days in a month: 26 days
- Working shift: 8 hours per day
- Monthly production capacity: 1,300 units selling for INR 50/unit
- 100% of the end product is sold within the same year.
- Bank loan not taken into account
- Assuming all pots and tea cups are sold within the same year
Note: All figures mentioned are indicative and for reference purpose only. Development Alternatives Group bears no liability for accuracy. For any further information, please contact Development Alternatives on +91-11-2654-4100 or +91-11-2654-4200.
Star Entrepreneur
lorem