DISPOSABLE CUPS AND PLATES INTRODUCTION Plastic disposable cups are used widely in all sectors for serving hot and cold beverages despite the introduction of the paper cups. The consumption of the disposable cups is increasing as the consumption of beverages and other items are increasing. MARKET DEMAND The Indian Plastic Industry has taken great strides in its quest for success. The last few decades have seen it rise to the position of a leading force in the country with a sizable base. The industry itself is growing at a fast pace and the per capita consumption of plastics in the country has increased manifold as compared to the earlier decade. Plastic has undoubtedly gained notable importance in every sphere of activities. It has helped substitute and save scarce natural resources. It is an inseparable part of our daily life. Constant development in polymer technology, processing machinery, know how and cost effective production is fast replacing plastics in every segment from its conventional materials •
Polymer demand in India to touch 7.3 million tons by 2006 - 2007 and 12.4 million tons by 2010 - 2011.
•
India is expected to be the 3rd largest consumer of plastics after US and china by 2010.
Growth rate between 12% - 15%. Consistently outperforming GDP. Major Raw Material Producers
15
Processing Units
22,000 Nos
Turnover
Rs. 25,000 crores 1
Capital Asset
Rs. 47,000 crores
Raw Material produced approx.
4.2 million tones
Raw Material consumed approx.
3.7 million tones
Employment Direct / Indirect
2.5 million
Export value approx.
USD 1104 million
Revenue to Government approx.
Rs. 6000 crores
Demand estimates for major Polymers - INDIA (1000 Tones) 2003 LDPE
281
2004 3000
Linear PE / LLDPE / HDPE
1666
PP
1737
2569
PVC
986
1614
PS
246
402
PET Bottles
45
100
PET Film
55
100
Demand estimates for Engineering Thermoplastics ABS
40
65
Polyamide ( 6 & 66)
20
32
2
3
Polycarbonate
20
32
Other Thermoplastics
26
40
116
155
PET / PBT Moulding Material
Thermo sets Demand estimates for Machinery Injection Moulding
32350 Nos
Blow Moulding
5050 Nos 2
Extrusion
16700 Nos
* Source: Task Force on Petrochemical / Industry Estimate The per capita plastics consumption, which is currently at 3 kg, is projected to go up to 7.7 kg by the year 2007. While it is true that our consumption is below the world average of 17 kg, per capita figures should be viewed in the context of our large population; sometimes per capita figures are useful only for trend analysis and not in absolute terms. INSTALLED CAPACITY Product
Installed
No of working
Capacity per
Capacity per
capacity
hours per day
day
annum
per hour
300 days per annum
Disposable
12500 nos
8
cups
1.00 lakh
300
nos
lakhs(average weight 2 grams)
PLANT AND MACHINERY S.no
Items
1
Conventional
Qty Roll
Fed
Automatic
1
Rs. lakhs 6.00
thermoforming machine 2
Scrap grinder
1.00
4
Dies for forming machine
100
Total
8.00
MANUFACTURING PROCESS The basic machinery required is a thermoforming plant in which PP/PS sheet is fed from bobbin reels and the required length is dragged from these reels. The conveyor chains carry the sheet through the heater assembly to the forming 3
table. The heated sheet is punched to form the shape of mould. The cups thus formed are stocked and the punched waste sheet is wound on the scrap sheet winder. To get printed cups, the sheets are printed before forming into cup. RAW MATERIALS For -lakh cups
300 Qty-kgs
High impact Polystyrene sheets
Rate/MT Value Rs. Lakhs
60000
80
48.00
TOTAL
48.00
Packing materials
300.00
1000
3.00
LAND AND BUILDINGS Built up area-Sq.ft
2500
Rent p.m.-Rs per .5 per sq.ft
12500
Advance-10 months. Rs
125000
UTILITIES Powers & Fuels Three phase-
KW
50.00
Power charges Rs.lakhs p.a
5.70
For process-Litres per day
0
For human consumption-
200
litres/day MANPOWER Monthly wages
Total
Supervisor
1
8000
8000
Skilled
2
5000
10000
Unskilled
2
3000
6000
Accounts Assistant
1
4000
4000
Sales Executive
1
5000
5000
4
Security
2
2000
sub total
4000 37000
Add benefits
20%
Total per month
7400 44400
TOTAL PER ANNUM-Rs. lakhs
5.33
SCHEDULE OF IMPLEMENTATION After the funding arrangements and the finalization of the premises, the project can be implemented within 3 months period. COST OF PRODUCTION AND PROFITABILTY Assumptions Installed capacity
Disposable plastic cups 300 lakhs per annum.
Capacity utilisation
Year-1 -60% Year -2 -70% Year-3 onwards- 80%
Selling price
Re.0.25 per cup
Raw materials
As per the details given above
Packing materials
As per details given above
Power
Rs.5.70 lakhs per annum at 100%
Wages and salaries
Rs. 5.33 lakhs with increase 5% every year.
Repairs and Maintenance
Rs.0.60 lakh per annum
Depreciation
Written down value method -15 % on machinery
Selling general and
Rs.20000 per month
administrative expenses Interest on Term loan
11% per annum
Interest on working capital
11 % per annum
Income tax
33.66 % on profits
5
ADDRESSES OF MACHINERY & EQUIPMENT SUPPLIERS 1.
Mangalam Industrial combines, 7-A (NP) K.G.Street, Padi, Chennai-600 050
2.
Wonderpack Industries (P) Ltd, 72, 1st Floor, Shivalaya Mansion, Hamington Road, Mumbai - 400 008.
3.
M/s Klockner Windsor India Ltd, Plot E-6, U2 Road, Wagle Industrial Estate, Thane-400 604.
4.
M/s Plasmec Engineering (P) Ltd, Plot No. A-325, Road No.21, Wagle Industrial Estate, Thane-400 604.
5.
M/s Plastopack, B-15, industrial Estate, Mogappair, Chennai-600 050.
ADDRESSES OF RAW MATERIAL AND OTHER CONSUMABLE SUPPLIERS 1. M/s Polychem Ltd, 7, Jamshedji Tata Road, Churchgate Reclamation, Bombay. 2. M/s East Anglia Plastics (I) Ltd, 3 Camac Street, Calcutta-700 016. 3. M/s Hindustan Polymers Ltd, Gopalapatnam, Vishakapatnam-530 027. 4. M/s BASF India Ltd, Tiecicon House, Dr. E. Moses Road, Bombay-400 011. 5. M/s Hindustan Polymers, Naar Building, 1-E, Jhandewalan, New Delhi. 6. M/s Indian Commercial Co (P) Ltd.,7, Jamshedji Tata Road, Churchgate Reclamation, Bombay-400 020. FINANCIAL ASPECTS 1. COST OF PROJECT [Rs. lakhs] Land & Building (Advance)
1.25
Plant & Machinery
8.00
Other Misc. assets
0.50
Pre-Operative expenses
1.50
Margin for WC
1.30 12.55 6
2. MEANS OF FINANCE Capital
6.55
Term Loan
6.00 12.55
Term Loan amount is assumed at 75% value of the Machinery. 3. COST OF PRODUCTION & PROFITABILITY STATEMENT [Rs. lakhs] Years
1
2
3
300
300
60%
Production/Sales-lakhs
180
Selling Price per piece-Rs.
0.25
Installed Capacity-lakhs Utilisation
4
5
300
300
300
70%
80%
80%
80%
210
240
240
240
Sales Value (Rs. lakhs)
45.00
52.50
60.00
60.00
60.00
Raw Materials
28.80
33.60
38.40
38.40
38.40
Packing Materials
1.80
2.10
2.40
2.40
2.40
Power
3.42
3.99
4.56
4.56
4.56
Wages & Salaries
5.33
5.59
5.87
6.16
6.47
Repairs & Maintenance
0.60
0.66
0.73
0.80
0.88
Depreciation
1.20
1.02
0.87
0.74
0.63
41.15
46.96
52.83
53.06
53.34
Selling, Admin, & General exp
2.40
2.52
2.65
2.78
2.92
Interest on Term Loan
0.66
0.58
0.41
0.25
0.08
Interest on Working Capital
0.45
0.45
0.45
0.45
0.45
44.66
50.51
56.34
56.54
56.79
Profit Before Tax
0.34
1.99
3.66
3.46
3.21
Provision for tax
0.00
0.67
1.23
1.17
1.08
Profit After Tax
0.34
1.32
2.43
2.29
2.13
Add: Depreciation
1.20
1.02
0.87
0.74
0.63
Cash Accruals
1.54
2.34
3.30
3.03
2.76
Repayment of Term loan
0.00
1.50
1.50
1.50
1.50
Cost of Production
Total
7
4. WORKING CAPITAL: Months
%
Values
Consumptions
Margin
Bank
Amount Finance
Raw Materials
0.50
1.20
25%
0.30
0.90
Consumables
2.00
0.30
25%
0.08
0.22
Finished goods
0.50
1.71
25%
0.43
1.28
Debtors
0.50
1.88
10%
0.19
1.69
Expenses
1.00
0.30
100%
0.30
0.00
1.30
4.09
5.39 5. PROFITABILITY RATIOS BASED ON 80% UTILISATION Profit after Tax
=
2.43
Sales
4%
60.00
Profit before Interest and Tax
=
4.52
Total Investment
27%
16.64
Profit after Tax
=
2.43
Promoters Capital
37%
6.55
6. BREAK EVEN LEVEL Fixed Cost (FC): [Rs. lakhs] Wages & Salaries
5.87
Repairs & Maintenance
0.73
Depreciation
0.87
Admin. & General expenses
2.65
Interest on TL
0.41 10.53
Profit Before Tax (P) BEL = FC x 100 FC +P
3.66 = 10.53
x
14.19 59% of installed capacity
8
80 100
x
100
