Minimal Requirements to Set Up an Electronic Toy Making Business


Waste management

Plastic forms a significant part of the toy industry. Even electronic toys use plastic in their manufacturing process, either in the console or for packaging and product itself, and most are not recyclable. The government places utmost importance on curbing environmental pollution, thus making it necessary for producers of electronic toys to use environment-friendly techniques of production and adopt pollution-control measures by process modification and technology substitution. To curb emission of harmful pollutants into the atmosphere, the following steps can be taken.

In the electronics industry, fumes and gases are released during soldering, which are harmful to people as well as the environment. Alternate eco-friendly technologies may be used to phase out existing manufacturing technologies. Numerous new fluxes have been developed containing two to ten per cent solids as opposed to the traditional 15 to 35 per cent solids.

The electronics industry uses CFC, carbon tetrachloride and methyl chloroform for cleaning of PCBs after assembly to remove flux residues left after soldering, and various kinds of foams for packaging. Many alternative solvents could replace CFC-113 and methyl chloroform in electronics cleaning. Other chlorinated solvents such as trichloroethylene, perchloroethylene and methylene chloride have been used as effective cleaners in electronics industry for many years. Organic solvents like ketones and alcohols are effective in removing solder fluxes and other polar contaminants.

With growing demand for energy needs, coupled with rising energy costs, the government of India now encourages energy-efficient means of production and manufacturing in the industrial sector. The following steps may contribute to the conservation of energy:

1. Adoption of energy-conserving technologies, production aids and testing facilities

2. Efficient management of process/manufacturing machineries and systems, QC and testing equipment for yielding maximum energy conservation

3. Optimum use of electrical energy for heating during the soldering process obtained by using efficient temperature-controlled soldering and de-soldering

4. Periodical maintenance of motors, compressors and the like

5. Use of power factor correction capacitors; proper selection and layout of lighting system; timely switching on and switching off of the lights; use of compact fluorescent lamps wherever possible and so on

Business economics

An indicative analysis has been done considering the data available at Ministry of Small and Medium Enterprises (MSME), government of India, website.

Some of the costs may vary depending on qualities/capacity, production plan, cost applicable at point of operation and location characteristics, wherever applicable. However, calculation basics will remain the same.

Assumptions and basis of calculation.

1. Production capacity: 2400 units/annum.

2. Shifting: Maximum capacity utilisation on single shift basis for 300 days a year. Capacity utilisation of the unit is taken as 100 per cent for financial analysis.

3. Salaries and wages, cost of raw materials, utilities, civil construction and other cost factors are likely to vary with time and location.

4. Cost of machinery and equipment refer to a particular make/model and prices are approximate.

5. Costs involved in business unit registration, project preparation, legal compliance cost, etc, whenever required could be considered under pre-operative expenses.

6. Breakeven point percentage indicated is of full-capacity utilisation.

7. Interest on term and working capital loans must be preferably on current rate. In this report it is taken as 12 per cent. Otherwise, the rate of interest on an average may be taken at 16 per cent. The rate may vary depending upon the policy of the financial institutions/agencies from time to time.

8. Essential production machinery and test equipment required for the project have been indicated. The unit may also utilise common test facilities available at electronics test and development centres and electronic regional test laboratories set up by the state governments and STQC Directorate of Department of Information Technology, Ministry of Communication and Information Technology, to manufacture products conforming to Bureau of Indian Standards (BIS), or from any other shared resource centre. The financial part will change accordingly.


The cost for land and building and plant, machinery and equipment cost, that is, fixed capital is shown in Table I, and working capital (required for three months) in Table II.
Total capital investment is given in Table III, and the cost of production per annum in Table IV. Turnover per annum is shown in Table V.

Profit per annum (before tax) = Turnover per annum – Cost of production per annum
= 6,000,000–5,096,980 = 903,020

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