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Introduction
The gems and jewellery industry plays an important part in the Indian
economy, constituting almost 5–6 per cent of the overall GDP. Today, the
overall market stands at Rs. 4,50,000 crore of which the domestic market is
estimated at Rs. 2,50,000 crore and exports at Rs. 2,00,000 crore. The domestic
gems and jewellery industry is estimated to reach Rs. 7,20,000 crore by 2018.
The sheer size of this industry provides direct employment to roughly 2.5
million people and has the potential to generate additional employment of
0.7–1.5 million over the next five years.
Silver in India comes next to gold in the jewellery buying preference
of Indians. With the current downward spiraling of gold prices, silver is the
new-found love of Indians. The shiny metal has been able to hold its price
and even seen appreciations in a time when gold has been continuously
losing shine for the past 2-3 years.
Silver in various forms is popular in the Indian culture. The most
significant role is played by it in weddings and birthdays. Other ceremonies
which see silver being used as gifts and puja item are naming ceremony of
babies, engagement ceremonies and pujas during Indian festivals like Diwali
and Holi.

Project
The Proposed Project is to start a silver ornaments making unit as a
cottage industry at Kottayam. The Promoter will supply raw materials and
get the ornaments made by 20 gold smith families at Nattassery Kottayam.
Apart from that he will collect silver ornaments at Wholesale rate from
silver smiths.
The Promoter also plans to sell traditional and modern designer
ornaments through online platform. Also the unit will letout designer
ornaments for wedding and other such events.

Scope of the Project

India is a huge exporter of silver jewellery and silverware. Huge
demand for silver is seen from countries like the United States and those in
the Middle East. Silver export companies in India are trying to expand to
newer pastures like markets in China, Russia and Australia. In terms of
silver jewellery, India is the third largest fabricator of silver jewellery in the
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world. The popularity of silver in India also stems from the fact that it is
cheap in comparison to gold and other precious metals like platinum. This
makes it easier for people to buy silver for themselves as well as for gifting
purposes.
Silver jewellery in India is currently popular not just due to its lower
prices but also because several designer stores and jewellery designers have
entered this space. These new-age designers are giving a new and trendy look
to silver jewellery and gifting articles and have clearly created substantial
demand for the white metal. Surveys done in this regard have revealed that
youngsters especially have started appreciating silver better than gold
because the current jewellery designs are so much more chic and aptly
proceed as compared to the same designs made out of gold or platinum.
Indians are fond of jewellery items like earrings, necklaces, toe-rings,
anklets, rings and so on. Hence, silver finds sufficient demand in the
jewellery sector of the country. Different states of India have different
preference for silver items. Like silver anklets and silver toe rings are
considered important bridal jewellery for people in North India as well as for
those in certain states of South India. Similarly, giving away silver coins as
tokens of love or as return gifts, is considered auspicious during Indian
weddings.

Jewelry & Silverware Demand

Accounting for approximately 25% of annual silver demand, silver
jewelry and eating utensils have long been prized for their brilliant luster and
easy workability. A rising gold price and growing markets for mid-priced
jewelry have led many jewelry and fashion designers to turn to silver as their
medium of choice.
Pure silver, also known as .999 fine silver, is highly tarnish resistant
but too soft for use in jewelry. For this reason silversmiths often alloy fine
silver with other metals like copper, to harden it.For example, sterling silver
is 92.5 % silver and 7.5 % copper. Sterling silver is a silver jewelry standard in
many countries and has been since the 14th century. This popular alloy is
ideal for silver earrings, silver bracelets and silver necklaces because its
durability ensures pieces will stay securely fastened when worn.

Today, the silver jewellery industry in India has already reached a

market potential of Rs. 15,000 crore and is expected to grow by 300 per cent to
reach Rs. 45,000 crore in the next 3–5 years. Even within the export category,
GJEPC has reported the fastest growth in silver jewellery exports. The
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exports for silver jewellery have doubled in the past couple of years, owing to
the trending demand for silver jewellery in the international market.
Post globalization, the jewellery market in India has evolved and is
growing in its jewellery consumption pattern. It is a well-known fact that
India is a young country where over 50 per cent of the population is less than
25 years of age. So the country is divided between people born prior to 1990
and post 1990. The young consumers born post 1990 are born in the digital
age with computers, internet, social networking sites, -iPads, mobile phones,
smart phones/televisions with over 100 channels to choose from, etc. This
has brought a paradigm shift in their lifestyle and purchase behaviour.
Today’s young consumers explore products on the web and are comfortable
making purchases online. They are looking for great designs in jewellery at
affordable prices. The costume jewellery is unbranded and has generic pieces
at less than Rs. 2,000, but has a poor finish. On the other hand, fine jewellery
with gold and diamonds starts at Rs 20,000. So there is a huge gap between
Rs. 2,000 and Rs 20,000, and that is where silver fits in well and has a great
acceptance from the young audience.
Nowadays, it is believed that “the way you dress is the way you get
addressed”. The contemporary Indian women today adorn jewellery as an
expression of their individuality and attitude. Changing lifestyles has
presented an opportunity for women to dress differently on various
occasions. A woman sports different looks for social events, parties, family
functions, weddings, and other important occasions. So it may be a casual,
sporty, classy, traditional, and sexy or any other look. For every look she
needs to adorn herself with complimenting jewellery. Silver jewellery
provides her exactly with these options at affordable prices.
Silver being cheaper gives excellent scope for creativity and design
innovations. It presents opportunities that are not possible with gold and
diamond. Design has become the key differentiator in the affordable
jewellery segment. Consumers today prefer jewellery that they can adorn
and make a personal statement. The young believe in adornment and in
indulgence unlike the older days, where jewellery was meant more for
securing in lockers than for wearing purposes.
Growing e-commerce or online market and steep fashion jewellery
demand is driving the push for silver jewellery in the upward trend. A
number of big brands are venturing into the BIS 925 sterling silver jewellery
segment.
Silver is projected to be the new gold in the next five years with
respect to investment and personal jewellery preferences. The trendy silver
jewellery that a woman adorns is expected to give a substantial appreciation
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in the coming years. So it is time you make your personal style statement
with sterling silver jewellery.

Promoter
The Promoter of the unit is Mr. Nadesan K M. He is from a
traditional gold smith family and has been in to this field for more than 40
years. He is also an expert in traditional ornament making. Since he is into
this field for such a long period, he has good relation with various shops and
dealers from different part of the State who are in this field.

Location
The unit will be operated from Nattassery which is a small village in
Kottayam district. The location is just 4 km away from the city centre and
has all required infrastructure facility. With regard to availability of
manpower, Nattassery is a traditional goldsmith village and hence has a
large population of gold smiths.

Employment Generation
As mentioned above, the proposed unit will provide employment
opportunity for atleast 20 gold smiths which will provide a recovery
provision for families who are currently unemployed due to the intervention
of huge players in the gold jewellery market.

Financial Aspects
Assumptions made for preparation of the Financial Statements

Following are the major assumptions made in the preparation of the

projected financials:-

 Depreciation on Fixed Assets is provided for at 10% per annum.

 Interest on Term Loan is calculated at 11.50% per annum.
 Income Tax is computed at prevailing rates.
 Income and expenditures are increased at least by 10% year
after year.
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SCHEDULE OF FIXED ASSETS

Particulars Amount
1 Tools & Equipments 100000.00
2 Web Development 150000.00
3 Weighing Balance 2500.00
4 Laptop, Printer & Accessories 35000.00
5 Tally Software 21240.00
Total 308740.00

WORKING CAPITAL CALCULATION

Purchase 1000000.00

Advertisement & Other Promotional Expenses 30000.00

Salary & Remuneration 15000.00
Total Working Capital Requirement 1045000.00

TOTAL PROJECT COST

Fixed Assets 308740.00
Working Capital Requirement 1045000.00
Total 1353740.00

SOURCE OF FUND
Promoter's Contribution 26.13% 353740.00
Term Loan 18.47% 250000.00
Working Capital Loan 55.40% 750000.00
Total 1353740.00
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CONCLUSION
The purpose of this Feasibility Study was to determine the feasibility
of starting silver ornaments manufacturing unit at Kottayam. We have
considered and analysed in detail various technical and economic factors and
outcome of all these analysis was positive which means the proposed project
is technically feasible. At the last part of the study we have made a study on
the financial aspects of the project and the results are arranged in Cash
Flow Statements, Profit & Loss Account and Balance sheet for an easy
understanding. The estimated operational results and cash flow of the
proposed project shows that the project is financially viable.