Automatic Project

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Contents

Contents.............................................................................................1About Paper bags.............................................................................1Market potential.................................................................................2Projected annual financials in a nutshell........................................2Basis & Presumption........................................................................3Production Process (An Overview).................................................4Quality Control & Standards............................................................5Land & Building (rental)...................................................................5Machineries & Equipments..............................................................5

Raw Materials (Per Month)...............................................................6Other Expenditure (Per Month)........................................................7Staff and Labors (Per Month)...........................................................7Working Capital (per Month)............................................................8Total Capital Investment...................................................................8Cost of Production (Per Annum).....................................................9Total Sales (Per Annum)...................................................................9Profitability (Per Annum)..................................................................9Break Even Analysis (Per Annum)................................................10

A) Fixed Cost...................................................................................10

About Paper bags

Did you know that it is possible to produce a bag that is as durable and

cheap as a plastic bag is, yet without harming the environment? In

these days of heightened environment concerns, where even the

slightest damage to the environment is banned by legislation, it makesgood business sense to remain ecologically-friendly

There are paper bags that can hold up to 20 kgs of weight without

getting torn bags that are made of paper material called sarc-kraft

can withstand such weight. Contrary to popular misconception, paper


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Project report on manufacture of Paper-bags

bags can compete with any kind of plastic bag in terms of all features.

Paper bags can thus cater to any kind of conceivably end-use

Market potential

Just consider the sheer size of the existing market for plastic carry

bags. It amounts to 600 billion bags. Many governments today are

increasingly becoming environment-sensitive and at least project

themselves to be so. Big business too wants to be seen as eco-

friendly.

Several local government bodies such as city municipal corporations

and town-planning bodies have banned usage of plastic bags. In fact in

all hill stations in India, the use of plastic bags has been banned. That

day when consumers and business entities may have no option but to

start using paper bags instead of plastic bags is not far off.

The market size for paper bags, in a single hill station like Nilgiris

(Ootacamund) in Southern India conservatively amounts to 10 million

bags

Projected annual financials in a nutshell

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Sales revenue 41.40

Less:

Raw-material cost 24.57

Labor cost 3.72Power & Administration 2.40

Other overheads 2.48

33.16

Cash profit 8.24

Rs in lakhs


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Basis & Presumption

The Production capacity is based on machines installed andcongenial working conditions available. The cost of machinery, raw

materials labor etc. or based on the local market. Single shift workingat 8 hours shift is presumed.

1. The estimate are drawn for a production capacity generally

considered techno-economically viable for model type ofmanufacturing activity

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2. The information supplied is based on a standard type ofmanufacturing activity utilizing conventional techniques of

production at optimum levels of performance.

3. Costs in respect of land and building, machinery and equipment,

raw materials and the selling price of the finished products etc.

are those generally obtaining at the time of preparation of theproject profiles and may vary depending upon various factors.

Production Process (An Overview)

Paper Carry Bag Manufacturing process depends upon thevolume and weight of the Products to be carried. Accordingly we have

to use various kinds of Papers with different GSMs and the BurstingStrengths. We can produce paper carry bags to hold up to 20Kgs.

Paper fed into the machine in roll form. In the first bags gets

printed with the online paper flexo printing unit attached with the

machine. After the printing the paper goes through the chamber inwhich Different size of width forming, gazette forming, length formingdies, gear wheels. Stereo wheels and knives are used to fold and

shape the bags into required sizes Brass gum tank is used for

Adhesion. Ultimately it comes to the Bag counting unit and getscounted then stacked together.

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Kraft , Duplex, Art, Butter, Wax coated, Poly sprayed paper all

can be used in roll form up to 220 GSM & B.F. up to 40.

Quality Control & Standards

In the beginning Kraft Paper can be used for Paper Carry BagManufacturing process. 100 t0 200 Grams Per Square Meter paper

and the 16 to 30 Bursting strength is the common and standard one.The printing, proper Adhesion and the Punching of the Eyelets has to

be taken care and inspected in the finished products

Land & Building (rental)

Covered area of 800 Sq.Feet is rented at Rs. 5000.00

Machineries & Equipments

1. Automatic Paper Carry Bag Machineries with following accessories.

a) Different Size of width forming diesb) Bottom/side gazette forming dies

c) Length forming gear wheels and stereo wheels

d) Brass gum tanke) bag counting unit

Rs.6, 75,000.00

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2. Eyelet Punching Machine Rs. 11,500.00

3. D Handle Cutting Hydraulic Machine Rs.19,800.00

4. Transport, Erection & Installation charges 10% Rs.47, 675.00

--------------------

Total Rs. 7, 06,300.00--------------------

Raw Materials (Per Month)

1. Kraft Papers - 5 Tonnes -Rs.1, 00, 000.00

2. Eyelet Buttons - 55 Kgs. - Rs. 29, 700.00

3. Cotton Ropes - 500 Kgs. - Rs. 50, 000.00

4. Adhesive - 2 Tonnes - Rs. 12, 500.00

5. Printing Ink - - Rs. 12, 500.00____________

Rs. 2, 04, 700.00

____________

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Other Expenditure (Per Month)

1. Power, Light and Water - Rs. 4, 500.00

2. Repairs and Renewals - Rs. 500.00

3. Postage & Stationery - Rs. 1, 000.00

4. Travel & Conveyance - Rs. 1, 000.00

5. Advertisements - Rs. 4, 000.00

6. Packing & Forwarding - Rs. 2, 000.00

7. Rent - Rs. 5, 000.00

8. Telephone - Rs. 2, 000.00

___________

Rs. 20, 000.00___________

Staff and Labors (Per Month)

Designation Nos. Salary

1. Manager / Marketing 1 Rs. 4,500.00

2. Supervisor 1 Rs. 3,500.00

3. Foreman (Skilled Worker) 1 Rs. 3,500.00

4. Unskilled labors 10 Rs.18,000.00

5. Watch Man 1 Rs. 1,500.00

__________Rs. 31,000.00

__________

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Working Capital (per Month)

1. Raw Materials - Rs.2, 04,700.00

2. Other Expenses - Rs. 20,000.00

3. Salary and Wages - Rs. 31,000.00

_____________

Rs. 2, 55,700. 00_____________

Total Capital Investment

1. Machinery & Equipment - Rs. 5, 08,950.00

2. Working Capital for 3Months - Rs. 7, 67,100.00____________

Rs.12, 61,200.00____________

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Cost of Production (Per Annum)

Working Capital per Annum - Rs.30, 68,400. 00

Depreciation on Machinery @ 25% - Rs. 1, 31,106.00

Interest on Total Investment @ 15% - Rs. 1, 17,018.00___________

Rs. 33,16,524.00___________

Total Sales (Per Annum)

Item Qty. Rate Value

Kraft Paper Bags 18, 00,000.00 Rs.2.30 (each) Rs.41, 40,000.00

Profitability (Per Annum)

Total Sales Cost of Production = Profit

Rs.41, 40,000.00 - Rs.33,16,524.00 = 8,23,476.00

Profit Percentage on Sales - Rs.8,23,476.00 /33, 16,524.00 =25%

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Break Even Analysis (Per Annum)

A) Fixed Cost

Rent - Rs. 60,000.00

Salary & Wages 40% - Rs. 1, 48,800.00

Other Expenses - Rs. 96,000.00

Depreciation on Machinery - Rs. 1, 31,106.00

Interest on Capital Invstmt. - Rs. 1, 17,018.00

___________

Total Rs. 5, 52, 924.00

___________

B) Break even Point

B.E.P. =Fixed Cost / (Fixed Cost + Profit)

=Rs.5, 52,924.00 /Rs.5, 52,924.00 +Rs.8, 23,476.00 = 40%

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Automatic Project