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Paper made carry_bag

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Ashok Kumar

This document proposes a business plan for producing paper carry bags. It estimates producing 15 lakh bags per year requiring raw materials costing Rs. 30.73 lakhs. Total capital required is Rs. 14.73 lakhs, including fixed assets of Rs. 8.80 lakhs. Annual sales are estimated at Rs. 45 lakhs with a profit of Rs. 4.25 lakhs, a 29% return on investment. Locations suggested are in Northeastern states.

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111 PAPER MADE CARRY BAG Introduction: Paper carry bags are common packaging materials being used by the textiles and cloth merchants, dry cleaners, bakers, grocers, stationers, sweet sellers etc. Market Potential: Establishment of shopping complexes and consumer stores in the rural, semi-urban and urban areas, the demand for paper bags has increased. Due to ban on polythene carry bags the demand has been growing very fast. Production Target: i) Quantity : 15,00,000 Nos. ii) Value : Rs 45.00 lakhs Raw materials: Sl.No. Particulars Qty. Rate Value (Rs akhs) i) Paper in roll : 1,00,000 Kg. @ Rs 30/kg 30.00 ii) Gum : 300 Kg. @ Rs 25/kg 0.08 iii) Printing Ink : 100 Kg @ Rs 200/kg 0.20 iv) Eyelet : 750 Pkt @ Rs 50/Pkt. 0.38 v) Lace : 75 kg @ Rs 100/kg 0.07 Total 30.73 Process: The major process steps are: i) Cutting paper into proper size by cutting machine. ii) Printing the paper as per need. iii) Making bags by automatic bag making machine. by folding, pasting, & shearing. iv) Punching v) Eyelet fitting vi) Lace fitting. Machinery: The major machineries & equipment required are – i) Automatic paper bag making machine. ii) Creezing machine. iii) Cutting machine. iv) Misc. tools and equipments. Infrastructure: The major infrastructure required are – Covered Area : 400 sq.mt. Power : 10 HP Location: The suggested locations are – Assam : Guwahati, Jorhat, Tinsuki Arunachal Pradesh : Itanagar, Meghalaya : Shillong, Nagaland : Dimapur, Tripura : Agartala, Manipur : Imphal, Sikkim : Gangtok & other Dist. H. Q.
112 Total Capital Requirement: The total capital requirement including fixed capital and working capital is estimated at Rs 14.73 lakhs as follows. Of this, the project cost comprising fixed capital and margin money on working capital is Rs 10.88 lakhs. A. Fixed Capital: (Rs in lakh) Land building Rented Plant & Machinery 8.00 Miscellaneous fixed assets 0.50 Preliminary and pre-operative expenses _ 0.30 Total (A) 8.80 ====== B. Working Capital: Raw materials 15 days 1.54 Finished goods 15 days 1.82 Working expenses 1 month 0.32 Receivables 15 days 2.25 Total (B) 5.93 ==== Total (A)+(B) 14.73 Note: Working capital may be financed as: Bank Finance (65%) .. Rs 3,85 Lakhs Margin Money (35%) .. Rs 2.08 Lakhs Rs 5.93 lakhs ============= Capital Cost of Project: 1. Fixed Cost .. Rs 8.80 Lakhs 2. Margin money for W.C. .. Rs 2.08 Lakhs Rs. 10.88 Lakhs ============= Means of Finance: Promoter’s contribution (35%) Rs 3.81 lakhs Term Loan (65%) Rs 7.07 lakhs Rs 10.88 lakhs ============ Operating Expenses: The annual operating expenses are estimated at Rs. 40.75 lakhs as given below: (Rs. lakhs) 1. Raw materials: 30.73 2. Packaging materials 0.35 3. Utilities 0.85 4. Wages & Salaries 3.00 5. Rent, Insurance 0.75 6. Other overheads 0.50 7. Selling expenses @ 5% on annual sales 2.25 8. Interest on term loan@ 13.50% 0.95 9. Interest on Bank Finance for Working Capital @12.75% 0.49 10. Depreciation @10% on m/c 0.88 Grand Total 40.75 ===== Sales Realization: Sl.No. Particulars Qty. Rate (Rs) Value (Rs Lakhs) 1.. Paper Carry Bags 15,00,000 3/- 45.00 TOTAL 45.00
113 Profitability : Based on the sales realization of Rs 45.00 lakhs and the operating expenses of Rs. 40.75 lakhs the profit would be Rs 4.25 lakhs per year. This works out to a return on investment of 29%. The plant will break even at 47% of the rated capacity. Highlight: The major highlights of the project are as follows: Total capital requirement : Rs 14.73 Lakhs Promoter’s contribution : Rs 3.81 “ Annual sales realization (70% cap.) : Rs 45.00 “ Annual operating expenses (70% cap.) : Rs 40.75 “ Annual profit (pre-tax) : Rs 4.25 “ Pre-tax Return on Sales : 9% Break Even Point : 47% No.of persons employed : 6 Nos. 1. Suppliers of Machinery 2. Suppliers of Raw Materials. 1. M/s Industrial Paper Machine (P) Ltd., A-32, Phase-I, Naraina Indl. Area, New Delhi 1. M/s Punalur Paper Mills, Punalur, Kerala 2. M/s. Sandhu Mechanical Engg. Works, Industrial Area-A, Plot No. 32, Ludhiana 2. M/s Star Paper Mills Ltd., Saharanpur UP 3. M/s Rupal Industries (Regd.), 728, Industrial Area-B, Ludhiana 3. M/s Rohtas Industries Ltd., Dalmianagar Bihar 4. M/s. Indo Europe Trading Co., 1980, Chandni Chowk, Delhi- 6 4. M/s Paper & Pulp Conversion Ltd. 376, Shukrawar Peth, Bihar. 5. M/s Kohli Industries, 29, Sona Udyog Indl. Estate, Parsi Panchayat Road, Andheri (E), Mumbair 5. M/s Ballarpur Paper Mills Ltd. Ballarpur, Dist: Chanda, Maharastra. 6. M/s Sirpur Paper Mills Ltd. Sirpur, Kaghaznagar Andhra Prades.

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Paper made carry_bag

  • 1. 111 PAPER MADE CARRY BAG Introduction: Paper carry bags are common packaging materials being used by the textiles and cloth merchants, dry cleaners, bakers, grocers, stationers, sweet sellers etc. Market Potential: Establishment of shopping complexes and consumer stores in the rural, semi-urban and urban areas, the demand for paper bags has increased. Due to ban on polythene carry bags the demand has been growing very fast. Production Target: i) Quantity : 15,00,000 Nos. ii) Value : Rs 45.00 lakhs Raw materials: Sl.No. Particulars Qty. Rate Value (Rs akhs) i) Paper in roll : 1,00,000 Kg. @ Rs 30/kg 30.00 ii) Gum : 300 Kg. @ Rs 25/kg 0.08 iii) Printing Ink : 100 Kg @ Rs 200/kg 0.20 iv) Eyelet : 750 Pkt @ Rs 50/Pkt. 0.38 v) Lace : 75 kg @ Rs 100/kg 0.07 Total 30.73 Process: The major process steps are: i) Cutting paper into proper size by cutting machine. ii) Printing the paper as per need. iii) Making bags by automatic bag making machine. by folding, pasting, & shearing. iv) Punching v) Eyelet fitting vi) Lace fitting. Machinery: The major machineries & equipment required are – i) Automatic paper bag making machine. ii) Creezing machine. iii) Cutting machine. iv) Misc. tools and equipments. Infrastructure: The major infrastructure required are – Covered Area : 400 sq.mt. Power : 10 HP Location: The suggested locations are – Assam : Guwahati, Jorhat, Tinsuki Arunachal Pradesh : Itanagar, Meghalaya : Shillong, Nagaland : Dimapur, Tripura : Agartala, Manipur : Imphal, Sikkim : Gangtok & other Dist. H. Q.
  • 2. 112 Total Capital Requirement: The total capital requirement including fixed capital and working capital is estimated at Rs 14.73 lakhs as follows. Of this, the project cost comprising fixed capital and margin money on working capital is Rs 10.88 lakhs. A. Fixed Capital: (Rs in lakh) Land building Rented Plant & Machinery 8.00 Miscellaneous fixed assets 0.50 Preliminary and pre-operative expenses _ 0.30 Total (A) 8.80 ====== B. Working Capital: Raw materials 15 days 1.54 Finished goods 15 days 1.82 Working expenses 1 month 0.32 Receivables 15 days 2.25 Total (B) 5.93 ==== Total (A)+(B) 14.73 Note: Working capital may be financed as: Bank Finance (65%) .. Rs 3,85 Lakhs Margin Money (35%) .. Rs 2.08 Lakhs Rs 5.93 lakhs ============= Capital Cost of Project: 1. Fixed Cost .. Rs 8.80 Lakhs 2. Margin money for W.C. .. Rs 2.08 Lakhs Rs. 10.88 Lakhs ============= Means of Finance: Promoter’s contribution (35%) Rs 3.81 lakhs Term Loan (65%) Rs 7.07 lakhs Rs 10.88 lakhs ============ Operating Expenses: The annual operating expenses are estimated at Rs. 40.75 lakhs as given below: (Rs. lakhs) 1. Raw materials: 30.73 2. Packaging materials 0.35 3. Utilities 0.85 4. Wages & Salaries 3.00 5. Rent, Insurance 0.75 6. Other overheads 0.50 7. Selling expenses @ 5% on annual sales 2.25 8. Interest on term loan@ 13.50% 0.95 9. Interest on Bank Finance for Working Capital @12.75% 0.49 10. Depreciation @10% on m/c 0.88 Grand Total 40.75 ===== Sales Realization: Sl.No. Particulars Qty. Rate (Rs) Value (Rs Lakhs) 1.. Paper Carry Bags 15,00,000 3/- 45.00 TOTAL 45.00
  • 3. 113 Profitability : Based on the sales realization of Rs 45.00 lakhs and the operating expenses of Rs. 40.75 lakhs the profit would be Rs 4.25 lakhs per year. This works out to a return on investment of 29%. The plant will break even at 47% of the rated capacity. Highlight: The major highlights of the project are as follows: Total capital requirement : Rs 14.73 Lakhs Promoter’s contribution : Rs 3.81 “ Annual sales realization (70% cap.) : Rs 45.00 “ Annual operating expenses (70% cap.) : Rs 40.75 “ Annual profit (pre-tax) : Rs 4.25 “ Pre-tax Return on Sales : 9% Break Even Point : 47% No.of persons employed : 6 Nos. 1. Suppliers of Machinery 2. Suppliers of Raw Materials. 1. M/s Industrial Paper Machine (P) Ltd., A-32, Phase-I, Naraina Indl. Area, New Delhi 1. M/s Punalur Paper Mills, Punalur, Kerala 2. M/s. Sandhu Mechanical Engg. Works, Industrial Area-A, Plot No. 32, Ludhiana 2. M/s Star Paper Mills Ltd., Saharanpur UP 3. M/s Rupal Industries (Regd.), 728, Industrial Area-B, Ludhiana 3. M/s Rohtas Industries Ltd., Dalmianagar Bihar 4. M/s. Indo Europe Trading Co., 1980, Chandni Chowk, Delhi- 6 4. M/s Paper & Pulp Conversion Ltd. 376, Shukrawar Peth, Bihar. 5. M/s Kohli Industries, 29, Sona Udyog Indl. Estate, Parsi Panchayat Road, Andheri (E), Mumbair 5. M/s Ballarpur Paper Mills Ltd. Ballarpur, Dist: Chanda, Maharastra. 6. M/s Sirpur Paper Mills Ltd. Sirpur, Kaghaznagar Andhra Prades.