Profile No.

: 235 NIC Code:27102

WELDING ELECTRODES

1. INTRODUCTION:

Welding is a fabrication or process that joins materials, usually metals by causing fusion. In
welding melting of base metal takes place and a filler material is typically added to the joint to
form a pool of molten material – the weld pool – that when cools, forms a joint that is usually
stronger than the base material.

Welding electrodes are used in Arc welding process where the electrical current flows between
electrode and base metal and electrical arc generate enough heat to melt both electrode and
base metal. In this process electrode with flux coating is used. The electrode holder holds the
electrode as that slowly melts away. Slag is formed from melting of flux that protects the weld
puddle from atmospheric contamination.

2. PRODUCT & ITS APPLICATION:

If the melting point of an arc welding electrode is less, it melts and fills the gap in the work
piece. Such an electrode is called consumable electrode. In arc welding, to produce deep weld,
consumable electrode is connected to the positive terminal of the power supply i.e., it is made
as anode, while work piece is connected to the negative terminal of the power supply i.e., it is
made cathode.
Welding electrode is normally made of mild steel with desired metal composition and it is
available in different gauges, to suit the base metal thickness and properties.

There are electrodes used for joining the steel, alloy steel etc. i.e. for fabrication. These are
also used widely for repairs of machines and equipment. Many Cast iron parts and worn out
steel parts may be rebuild by depositing metal through arc welding process. For special
applications, these electrodes are used to provide hard ware resistance metal surface viz hard
facing of jobs etc.
3. DESIRED QUALIFICATIONS FOR PROMOTER:

An engineering graduate preferably with mechanical or metallurgy background.

4. INDUSTRY OUTLOOK/TREND

The welding industry in India comprises various large, medium and small companies that
manufacture welding consumables. Large international players such as ESAB India Limited,
Bohler Welding Group, Ador Welding Ltd, Lincoln Electric Company Pvt Ltd, etc. compete with
various medium and small companies located all around industrial and urban centers in India
to provide services to end-user industries.

Welding stick electrodes dominated the welding consumables market in India with more than
55% share. Stick electrodes are primarily used in manual welding and they are low cost easy
to use and flexible in most general purpose fabrication work to other types of welding
consumables products. The welding electrode plants in unorganized sector with proper
standard specification and approval process is likely to grow in unorganized sector for both
stick and flux cored wire production. The Indian welding industry was dominated by low
technology and very rare technological innovation. However, in recent years, the demand of
automatic and semi-automatic welding production systems is rising.

However, demand for continuous welding wires and fluxes for MIG/ TIG welding are
anticipated to rise significantly due to rapid industrial investments due to their efficient
performance. In terms of revenue, flux cored wires is anticipated to be the fastest growing
product segment during the forecast period. Factors such as lower wastage, suitability for
automatic welding systems and higher productivity and better quality has led to wide usage.
The Submerged Arc welding wires and fluxes segment is projected to witness moderate
growth.

The technology trend of new welding techniques and machines and hence welding wire and
their delivery system is likely to dominate in manufacturing sector. Technology such as Orbital
TIG welding, robotic welding, and laser welding are some of the latest technologies that have
been introduced to meet precision welding requirements. Robotics and automation are
increasingly being deployed by industries to achieve welding quality and improve productivity.
Modern processes like Hot wire TIG, Activated TIG, Narrow groove SAW, Tandem SAW and
GMAW, Pulsed GMAW, ESSC with high speed fluxes, laser and hybrid laser, friction stir, thick
and thin section joining, exotic and refractory metal joining, invisible welding, and ultra-thin
wires joining have been introduced.

5. MARKET POTENTIAL AND MARKETING ISSUES. IF ANY:

It can be seen that welding electrodes are consumable and have vast application in all
manufacturing activities and they are also ideal for repairs where welding is probably the only
method of salvaging the broken or worn out metal parts.

Demand for welding consumables is directly proportional to steel consumption in the country.
End-use industries such as transportation, building & construction, oil & gas, and power are
likely to drive the welding consumables market in India in the near future. Huge expansion of
construction, shipbuilding and energy specifically wind power sectors in India will highlight the
strong growth of Indian welding market. The demand for welding consumables in India is likely
to experience strong growth owing to the advancements in technology and extensive growth of the
end-use industries. The Indian welding consumables market is likely to rise from Rs. 30.88 bn in
2013 to Rs 45.37 bn by the end of 2020. Robust outlook of the infrastructure sector, welding
consumables market is expected to grow at a CAGR 10-11% over next five years. Continuous
electrodes would witness higher growth compared to Manual Electrodes.

The end user sector growth in Automobile and transportation has over 25% share of welding
consumables. The construction/ infrastructure and power sector is expected to in terms of rate of
growth, over the forecast period of 2014-2020. Other applications such as marine / ship building
and general fabrication etc. are projected to rise at a moderate rate in the coming years. 

In view of almost universal application and consumable nature, there is very good scope for a
project of welding project. A good quality manufacturer will have very good scope of success.
6. RAW MATERIAL REQUIREMENTS:

Main materials are mild steel viz low and medium carbon steels and alloy steel wire rods and
flux materials like rutile sands and additive viz metal oxides and metal powder of nickel,
manganese, iron, etc. and cellulose, lime stone, magnesium

7. MANUFACTURING PROCESS:

Electrodes of different types are produced by drawing wires of different gauges from wire
roads of 6 mm or 8 mm. The drawn Electrode quality wire of required size is first straightened
in a straightening machine and cut to size and stored.

The flux as per the formulation is prepared in the dry blender and wet mixer. There are
different types of coating fluxes applied for shielded arc electrodes, which have different
results during the welding process. Viz cellulose coating generates a layer of gas to protect the
weld zone; the coatings of mineral substances, which leave a layer of slag.

Then slug of flux material is made in the cylindrical form in the automatic slug press. Then
slug is to be placed in the extrusion press and straight cut wires are fed where the extrusion
press pushed the wire through slug and pressing that to provide uniform coating on wire. Flux
coated core wire rod is passed on conveyor system and collected at the end. These flux coated
rods are then sent to drying oven for drying purposes. After drying, it is the electrode batch
undergoes sample are testing before packing and dispatch.

The process of continuous flux coated and flux core wire production systems that may be
considered as product diversification. The process of production is similar except that the flex
coating/ filling requires in line flux curing ovens and core filled system requires metal stip
forming in to a flux filled tube.

Welding electrodes should undergo regular sample/ batch testing for Mechanical, Metallurgical
and chemical testing, and provision must be made for testing laboratory. For quality control
tests to be conducted are Tensile Test, Hardness Test, Impact Test, Chemical Test, Bending
Test, Microscope Test, Moisture content etc.

8. MANPOWER REQUIREMENT:

The unit shall require highly skilled service persons. The unit can start from 8 employees
initially and increase to 23 or more depending on business volume.

Monthly
Sr. No Type of Employees No of Employees
Salary
Year 1 Year 2 Year 3 Year 4 Year 5
1 Skilled Operators 15000 4 9 15 15 15
2 Semi-Skilled/ Helpers 7000 9 12 24 24 24
3 Supervisor/ Manager 25000 1 1 2 2 2
4 Accounts/ Marketing 16000 1 2 2 2 2
5 Other Staff 7000 2 4 6 9 9

TOTAL 17 28 49 52 52

9. IMPLEMENTATION SCHEDULE:

The unit can be implemented within 6 months from the serious initiation of project work.

Time Required in
Sr. No Activities
Months
1 Acquisition of Premises 2
2 Construction (if Applicable) 2

3 Procurement and Installation of Plant and Machinery 2

4 Arrangement of Finance 2

5 Manpower Recruitment and start up 2

Total Time Required (Some Activities run concurrently) 6

10. COST OF PROJECT:

The unit will require total project cost of Rs 161.02 lakhs as shown below:

Sr. No Particulars In Lakhs

1 Land 20.00
2 Building 30.00
3 Plant and Machinery 52.20
4 Fixtures and Electrical Installation 3.60
5 Other Assets/ Preliminary and Preoperative Expenses 5.00
6 Margin for working Capital 50.22

TOTAL PROJECT COST 161.02

11. MEANS OF FINANCE:

The project will require promoter to invest about Rs 77.92 lakhs and seek bank loans of Rs
83.10 lakhs based on 70% loan on fixed assets.

Sr. No Particulars In Lakhs

1 Promoters Contribution 77.92

2 Loan Finance 83.10

TOTAL: 161.02

12. WORKING CAPITAL REQUIREMENTS:

Working capital requirements are calculated as below:

Sr. No Particulars Gross Amount Margin % Margin Amount Bank Finance

1 Inventories 34.52 40 13.81 20.71
2 Receivables 37.92 50 18.96 18.96
3 Overheads 3.65 100 3.65 0.00
4 Creditors 34.52 40 13.81 20.71
TOTAL 110.60 50.22 60.38
13. LIST OF MACHINERY REQUIRED:
Sr. No Particulars UOM Quantity Rate Total Value
 Main Machines/ Equipment

1 Multi stage Bull Block Wire drawing machine Nos 2 300000 600000

2 Automatic Wire straightening and cutting machine Nos 1 450000 450000

3 Flux mixing and blending Nos 2 120000 240000

4 Flux Slug press Automatic Nos 1 300000 300000

5 Flux Coating Extruder 350 T with conveyor Nos 1 850000 850000

6 Grip End Sander machine Nos 1 60000 60000
7 Baking Ovens 950 o C Nos 2 450000 900000

8 Air handling and dust collection system for plant Nos 1 150000 150000
9 Transport trolleys for Oven Nos 8 30000 240000
10 Packing Station Nos 1 300000 300000
11 Testing Lab Nos 1 300000 300000
12 Metallurgical Microscope Nos 3 150000 450000
13 Gen Workshop Machines for Maintenance Nos 1 150000 150000
14 Packing machine Nos 2 35000 70000
Subtotal: 5060000
Tools and Ancillaries
1 Misc. equipment trolleys etc. LS 1 120000 120000
2 Tools and gauges LS 1 40000 40000
Subtotal: 160000
Fixtures and Elect Installation
Storage and transport bins and trolleys LS 1 60000 60000
Office Furniture LS 1 20000 20000
Telephones/ Computer LS 1 30000 30000
Electrical Installation LS 1 250000 250000
Subtotal: 360000
Other Assets/ Preliminary and Preoperative
LS 1 500000 500000
Expenses

TOTAL PLANT MACHINERY COST 6080000

All the machines and equipment are available from local manufacturers. The entrepreneur
needs to ensure proper selection of product mix and proper type of dies and tooling to have
modern and flexible designs. It may be worthwhile to look at reconditioned imported
machines, dies and tooling. Some of the machinery and dies and tooling suppliers are listed
here below:
1. Mayfair Machine Kraft Private Limited
No. 5 A-9 Acre, Kothari Compound, SV Road, Thane-400610, Maharashtra, India

2. Deccan Dynamics
No. 21, Deccan Estate, MAK India Mill Road Goldwins, Civil Aerodrome Post,
Coimbatore – 641014, Tamil Nadu, India

3. General Electric
Gala No. 4, Pooja Industrial Estate, Azad Nagar, Bhayendar East, Mumbai-401105

4. Omega Weld Rod System

No. 1/455-G, Aachankulam Road Neelambur
Coimbatore- 641062, Tamil Nadu, India

5. Shree Krishna Pharma Machinery

No. 2, Vinayak Estate, Near Pharmatech, Changodhar, Changodar,
Ahmedabad-382213, Gujarat, India

14. PROFITABILITY CALCULATIONS:

Sr. No Particulars UOM Year Wise estimates

Year 1 Year 2 Year 3 Year 4 Year 5

1 Capacity Utilization % 40 50 60 70 80
 2 Sales Rs Lakhs 454.98 568.73 682.48 796.22 909.97
Raw Materials & Other Direct
3 Rs Lakhs 414.19 517.73 621.28 724.83 828.37
Inputs
4 Gross Margin Rs Lakhs 40.80 51.00 61.20 71.40 81.60

5 Overheads Except Interest Rs Lakhs 17.59 17.59 17.59 17.59 17.59

6 Interest Rs Lakhs 11.63 11.63 11.63 11.63 11.63

7 Depreciation Rs Lakhs 9.08 9.08 9.08 9.08 9.08

8 Net Profit Before Tax Rs Lakhs 2.50 12.70 22.90 33.10 43.29

The basis of profitability calculation:

The Unit will have capacity of 1200 MT per year of welding electrodes sizes/ material grades.
The sales prices of welding electrodes range from Rs 60 per Kg for MS electrodes to Rs 300
per kg depending on type, wire gauges, flux composition, metal grade and volumes.
Continuous wire products with flux cored or coated wired for TIG/ MIG etc. process prices
range from 600 per kg to Rs 1200 per kg for special alloys and flux compositions for critical
applications.

The raw material cost ranges from 35 to 65 per kg for mild steel wire rods and that of carbon
steel and stainless steel wire rods range from Rs 60 to 260 per Kg. The material requirements
are considered with wastage/ scrap etc. of 10 % of finished products. The unusable scrap is
sold at @ Rs 18 ~ 50 per Kg. and the income of same is added. Energy Costs are considered
at Rs 7 per Kwh and fuel cost is considered at Rs. 65 per liter. The depreciation of plant is
taken at 10 % and Interest costs are taken at 14 -15 % depending on type of industry.

15. BREAK EVEN ANALYSIS

The project is can reach break-even capacity at 37.55 % of the installed capacity as depicted
here below:
 Sr. No Particulars UOM Value

1 Sales at Full Capacity Rs Lakhs 1137.46

2 Variable Costs Rs Lakhs 1035.47

3 Fixed Cost incl. Interest Rs Lakhs 38.30

4 Break Even Capacity % of Inst Capacity 37.55

16. STATUTORY/ GOVERNMENT APPROVALS

The unit shall have to get state industrial unit registration from DIC, IEC Code for Export and
local authority clearance. Depending on structure of finance the company shall need to register
company with registrar of companies. The registration and approval for factory plan, safety for
Fire etc. requirement, registration as per Labour laws ESI, PF etc. shall be required as per
rules and applicability. Before starting the unit will also need GST registration for procurement
of materials as also for sale of goods. As such there is no pollution control registration
requirements, except installation of chimney/ blowers for heat treatment furnace / pickling line
and ensure safe environment as per rules of factory safety. Solid waste disposal shall have to
meet the required norms. Entrepreneur may contact State Pollution Control Board where ever
it is applicable.

17. BACKWARD AND FORWARD INTEGRATION

The machines and equipment offer scope for diversification in to producing the continuous flux
cored and coated electrode range of products and also take up import substitution for welding
electrodes by ensuring metal and flux compositions. The unit can also of other consumer and
industrial wire products / components etc. by using the spare capacities and machine
capabilities. As such there is not much scope for organic backward or forward integration.

18. TRAINING CENTERS/COURSES

There are no specific training centers for wire drawing technology. There are training for dies
and tools development run by several centers of excellence viz Indo German Tool Room at
Ahmedabad, Rajkot, Chennai, and CTTC Bhubaneswar etc. shall be helpful.

The most important scope of learning is in new product design and development by
associating with institutes like NID etc. Entrepreneur may also study the new product designs,
product range, features and specifications of leading Brands / competitors across the world by
scanning the Internet and downloading data. Viz. North American, Europe, China etc. markets.

Udyamimitra portal ( link : www.udyamimitra.in ) can also be accessed for hand-holding

services viz. application filling / project report preparation, EDP, financial Training, Skill
Development, mentoring etc.

Entrepreneurship program helps to run business successfully is also available from Institutes
like Entrepreneurship Development Institute of India (EDII) and its affiliates all over India.

Disclaimer:
Only few machine manufacturers are mentioned in the profile, although many machine
manufacturers are available in the market. The addresses given for machinery manufacturers
have been taken from reliable sources, to the best of knowledge and contacts.   However, no
responsibility is admitted, in case any inadvertent error or incorrectness is noticed therein. 
Further the same have been given by way of information only and do not carry any
recommendation.