mech_disposable plastic cup

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DISPOSABLE PLASTIC CUP

PRODUCT CODE : NA

QUALITY AND STANDARDS : As per customer requirement

PRODUCTION CAPACITY : 120 MT (Per Annum)

Value : Rs. 2,01,60,000/-

MONTH AND YEAR : July, 2014

OF PREPARATION

PREPARED BY : Sh. Harinder Kumar

Investigator (Mechanical)

1. INTRODUCTION

The disposable plastic cups are manufactured by thermoforming technique.

They are fast replacing conventional cups. Drinking water, Ice-cream and other dairy

products are packed in disposable cups. Besides Ice-cream industry, hotels,

restaurants, canteens etc. have been increasingly using disposable cups as against

conventional glass-wares or ceramic cups. Disposable cups are mainly used for food

items and are made out of polypropylene or polystyrene sheets. Sheets having

thickness 0.35 mm to 2 mm is used for these items in thermoforming machine. The

disposable cups are gaining popularity due to attractive look, light weight for

container, ease of transportation and low impermeability. Now-a-days organizations

like railways, airlines are using disposable cups for serving water, coffee, tea etc.

2. MARKET POTENTIAL

Due to the recent change in the life style of urban class the demand for

disposable cups is increasing at a rapid rate. Apart from being used at home, theyalso come in handy during parties, picnics and other functions and get-togethers.

Plastic disposable cups are also used by Ice-cream industry, hotels, restaurants,

canteens etc. but the major customer of disposable cups is ice-cream industry and

they have started using plastic cups instead of paper ones that were being used

earlier. The main advantage of these plastic cups is that they are completely leak

proof. Plastic cups can be made up of different sizes and they can hold bulk material

easily in comparison to the traditional paper cups. Besides organization like

Railways, Airlines are using a good quantity of plastic disposable cups.

Considering the above factors, demand of disposable cups is expected toincrease faster in future.


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3. BASIS AND PRESUMPTIONS

i. The basis for the calculation of the production capacity is calculated on singlelift basis on 75% efficiency.

ii. The rate of interest in the scheme has been taken on the basis of 14% at anaverage. How-ever, this figure is likely to vary depending on the financial

outlay of the project as well as location of the unit.iii. The breakeven point in the scheme has been calculated on the full capacity

utilization basis.

iv. Labour wages-Estimated on the minimum wages.

v. The Cost of machinery, equipment, raw material and other expenditureinitiated in the profile are based on the prices prevailing at the time of projectpreparation. Therefore they are subject to necessary change from time to timebased on local condition and availability.

4. IMPLEMENTATION SCHEDULE

S.No. ActivityEstimated

period required

1.Market survey for collection of data in respect of

demand, raw material, machinery and selection of site.4 Weeks

2.Preparation of project document and registration and

other clearance.4 Weeks

3. Arrangement of finance /loan 4 Weeks

4. Procurement of machinery & equipment & Installation 6 Weeks5. Purchase of raw materials 2 Weeks

6. Trail Production 2 Weeks

Total 22 Weeks

5. TECHNICAL ASPECTS

5.1. Process of ManufacturingPolypropylene/Polystyrene sheet feeding reels of preset length is dragged

from bobbin reel in the Thermoforming plant. The conveyor chains carry the sheetthrough the heater assembly to the Forming table. The heated sheet is punched toform the shape of the mould. The cups thus formed are stocked and the punchedwaster sheet is wound on scrap sheet winder. To get printed cups, the sheets areprinted before forming into cup. Taking 200ml. cup as yard stick as it is mostly usedfor serving drinking water, coffee/tea etc., The installed capacity of the machinewith 16 cavities mould is approximately 1,53,600 cups per shift. In terms of weight, a200ml cup made of 0.7mm thick High Impact Polystyrene sheet is approximately2.58 gms. Therefore, the total weight of output per shift is 396 Kg Approx. Theaverage weight of sheet required per cup is 3.2gms. (Which implies wastage ofapproximately 0.62 gms per cup). As the raw material wastage is very high the scrapneeds to be recycled. The scrap can be ground and may be either extruded in sheetextruder or sale.


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5.2. Production Capacity

120 MT of Disposable Plastic Cups @ Rs. 1,54,000/- per MT

Value: Rs. 1,84,80,000/-

5.3. Quality Control and Standards

The Plastic disposable cups are manufactured as per customer requirement

and specification.

5.4. Motive Power 70 KW

5.5. Pollution Control

The unit does not create any pollution. However, proper ventilation should be

made in the processing area for the better circulation of the fresh air.

5.6. Energy Conservation

Entrepreneurs may select energy efficient machinery and proper planning has

also to be made for saving energy in the unit.

6. FINANCIAL ASPECT

6.1. Fixed Capital

Land & Building: Covered Area of 400 Sq. Meters on rent @ Rs. 42,000/month.

6.1.1. Machinery and Equipments

S.No. Description Qty. Amount (Rs.)

1.Automatic thermoforming machinePower 40 kw

1 16,00,000

2. Scrap grinder 15H.P. 1 2,00,000

3. Air compressor 25 H.P. 1 3,00,000

Sub Total 21,00,000

4. Installation and electrification @ 10% 2,10,000

5. Die & Punch for cups 3,00,000

6. Testing equipment & office furniture etc 80,000

7. Preoperative expenses 20,000

Total 27,10,000


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6.3. Total Capital Investment

Fixed capital Rs. 27,10,000

Working capital for 3 months Rs. 41,14,800

Total Rs. 68,24,800

7. FINANCIAL ANALYSIS

7.1. Cost of Production (per annum in Rs.)

1. Depreciation on machinery @ 10% 2,10,000

2. Depreciation on Tools, Fixture & Spares @ 20% 60,000

4. Depreciation on office equipment & furniture @ 20% 16,000

5. Working Capital 1,64,59,200

6. Interest on total capital investment @ 14% 9,55,472

Total 1,77,00,672Say 1,77,00,700

7.2. Turnover (per annum)

S. No. Item Qty.(M.T.) Unit Price (Rs.) Total (Rs.)

1 Plastic disposable cup 120 1,54,000 1,84,80,000

2 Sale of recycle scrap - - 16,80,000

Total 2,01,60,000

7.3. Net Profit (per annum)= Turnover – cost of production

= Rs. 2,01,60,000 – 1,77,00,700 = Rs. 24,59,300/-

7.4. Net Profit Ratio

=Net profit per year

X 100Turnover per year

=

24,59,300

X 1002,01,60,000

= 12.2 %

7.5. Rate of Return

=Net profit per year

X 100Total Capital Investment

=24,59,300

X 10068,24,800

= 36.0 %


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7.6. Break-even Point

S.No. Fixed Cost (Per Annum) (Rs.)

1 Rent 5,04,000

2 Insurance 36,000

3 Depreciation 2,86,000

4 Interest on capital investment 9,55,472

5 40% of Salary and wages 4,33,920

640% of other contingents expenses(excluding rent& Insurance)

57,600

Total 22,72,992

Say 22,73,000

B.E.P

=Fixed Cost

X 100Fixed Cost + Net Profit

=22,73,000

X 10022,73,000 + 24,59,300

= 48.0 %

Name and Addresses of Machinery & Equipment Suppliers:-

1. M/s K. L. Thermoformers Pvt. Ltd.C-67/2, Okhla Ind. Area, New Delhi.

2. M/s Sant Engineering Industries, 580, Karol Bagh, New Delhi.

3. M/s Endson Enterprises, 302/23, Vikas Puri, New Delhi.

Raw Material

Raw Material is available locally.

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