Why Paper Bags?

Eco-friendly
increasing awareness of hazards of plastic Ban imposed on plastic bags in many states Current fashion trend

Product Profile
Products range: The bags of six sizes are being manufactured, Size ranges from; 18 24 to 40 50 . We can also manufacture bags according to the customers specifications & requirement. Product strength: All our product having good busting strength and it is between 18- 36 g/inch. Product quality: Manufacturing superior quality products. Purchases reputed supplier. Product price: Our price range is between 3 to 10 Rs.

Total Company Risk

Product Market Risk Customer loss Product Obsolescence Competition Increases Product Demand Decreases Financial Risk Capital cost change Inflation Default on debt Exchange rate changes Legal Risk Shareholder and Employee discrimination lawsuits

Input risk Input price increases Labor strikes Key employees leave Supplier fails Operational Risk Machinery breakdown Product defect increases Inventory Obsolescence Regulatory Risk Environmental law change Price support ends

MARKETING PLAN
EXECUTIVE SUMMARY Target the big cities of Maharashtra like Mumbai, Pune, Nagpur, Nasik, Aurangabad and Kolhapur Current demand of the product in six cities is around 40lakhs/month and is expected to go high Consumer acceptance and brand recognition are the major barriers USP is excellent service, quality products at a reasonable price, transportation network and sales force capabilities SWOT Strength: Low cost with high quality. Dedicated & punctual staff. On time delivery. Favorable access to distribution networks. Weaknesses: Entry. Inexperience. High cost structure. Limited area of operation. Not able to enjoy economy of scale.
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Opportunities: Scope of export. Large market. Changing of lifestyle/fashion. Environmental conscious customer. Threats: Large number of competitors. Threats of substitute product. Highly sensitive & volatile market. New regulation. MARKETING STRATEGY Marketing objective: important domestic player in terms of market share backward integration expand business Target market: Our customers would be malls, multiplexes, hypermarkets, supermarkets, departmental stores, speciality stores, gift shops etc
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Demand forecast: The Demand of the product in six cities would be around 40lakhs units/month.
Promotion: Promotion strategies like; Discounts Salesperson incentives Word of mouth and Friends network Commission to sale person, credit to customers catalogs Contract with the NGOs working on environment friendly projects like use of paper bags Travelling and other incentives etc. Strategies: market penetration strategy
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Competitors: A.L paper house, jaipur, Rajasthan. Delhi paper bag manufacturer, Delhi. Vishal paper bag company, Mumbai, Maharashtra. Market research: Primary data through buyers intention survey FINANCIAL: Break even analysis: Break Even Point will be achieved in 10.6 Months Sales forecast: target sales would be around 6 lakhs units/month CONTROLS: Marketing organisation: 1 sales manager responsible for the sale in six cities.

7 salesmen; 3 for Mumbai, 2 for Pune, 1 for Nasik and Nagpur and 1 for Aurangabad and Kolhapur [first year]
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OPERATION PLAN
A) Plant Location:PATALGANGA MIDC (RAIGAD) Maharashtra.  Distance from Mumbai is 75 kms.  Distance from Pune is 77 kms.  Size of land= 2000 Sq ft.  Approximate cost of land= Rs 540000 (270 Rs, per Sq Ft).  Approximate construction cost= Rs 510000.
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B) Plant Machineries and Equipment:1) Automatic Paper Bag Manufacturing Machine Cost of machine = Rs 4,80,000/Production capacity= 30,000 bags per shift (8 hrs). Utilized capacity = 24,000 bags per shift 2) Automatic Screen Printing Machine Cost of each machine= Rs 22,000/Production capacity = 12000 bags per shift (8 hrs). 3) Eyelet Machine. Cost of each machine= Rs 20,000/Production capacity =6000 bags per shift (8 hrs). 4) D-Shape Eyelet Machine. Cost of machine= Rs18, 000 /Production capacity= 6000 bags per shift (8hrs).
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C) Plant Layout:D) Raw Material Requirement:-

 For producing the paper bags the CRAFT Paper is used as a raw material.  The required specification is in terms of Busting Factor and GSM of the paper.  For producing the quality bags the busting factor of the craft paper should range between 18 to 36 gm/inch and the GSM of the paper is between 120 to 400.
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E) Suppliers :1) Premium Paper & Board Industries Ltd. 2) Rama Pulp & Paper Ltd. 3) Kay Pulp & Paper Mill Ltd. 4) Aerographic Papers Pvt. Ltd.

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Human Resource

Administrative Workforce Name of position Finance manager Sales manager Asst.Sales manager Salesman Clerk Guard 2009-10 1 1 7 1 3 2010-11 1 1 10 1 3 2011-12 1 1 1 12 1 3

Manufacturing Workforce No .of position Supervisor Skilled Unskilled Helper 2009-10 1 1 6 1 2010-11 1 2 8 1 2011-12 2 2 12 2

Various HR related issues Bonus Attendance Annual leave with wages Holidays Working hours Safety and health Benefits Record maintenance Motivating our people

Legal aspects .
Approval of nameMemorandum of AssociationArticle of AssociationCertificate of IncorporationTax registration-

Financial Plan

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Assumptions
Inflation rate may vary between 4%-6%. Sales target will be achieved according market research and production capacity. Capital cost may vary but marginally

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Financial policies
Depreciation -10% Creditors. Debtors . Closing stock. Short term investment. Profit margin 6 %.

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Capital
Capital Requirement
Particulars Fixed assets requirement Working capital requirement Total Amount Rs. 1702000 2271000 3973000

Capital sources
Particulars Promoters contribution Bank Loan Total
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Amount Rs. 2200000 1800000 4000000

Projected Cost Sheet

Amt. in Rs. Particulars Direct cost Administrative overheads Selling overheads Total Cost Profit at 6 % Sales Selling Price Per Unit 1st year 27888000 1758600 2298600 30186600 1811196 31997796 4.45 2nd year 41886000 2207180 3067180 44953180 2697190 47650370 4.00 3rd year 66162000 2704462 3904462 70066462 4203987 74270449 4.15

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Projected Trading & P&L A/c

Amt. in Rs. Particulars Net sales Gross Profit Depreciation Indirect Income Net Profit 1367808 1st year 31997796 4304044 120200 2nd year 47650371 5750696 157180 37500 1831061 3rd year 74270448 8521470 141462 37500 3255906

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Projected Balance Sheet

Amt. in Rs. Particulars Share Capital Bank Loan Dividend Fixed Assets Current Liabilities Current Assets 1st year 2200000 180000 275000 2821800 6227484 8564489 2nd year 2200000 1800000 825000 2664620 6407509 9841757 3rd year 2200000 1800000 1100000 3873158 4123651 13383268

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Cash Flow Statement

Amt. in Rs. Particulars Total Inflow Total Outflow Net Inflow 2009-10 40210839 40190075 20764 2010-11 74515952 74453852 62100 2011-12 109500464 109473387 29900

Discounted cash flow Statement Amt. in Rs.

Particulars Total Discounted Cash Inflow Discounted Cash out flow Net Present Value Amount Rs. 40162089 4490860 35671229

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Ratio Analysis
Particulars Current Ratio Quick Ratio Debt Equity Ratio Gross Profit Ratio Net Profit Ratio Working Capital TOR Inventory TOR 2009-10 1.36 : 1 0.78 : 1 0.60 : 1 13.45% 4.27% 14.09 8.86 2010-11 1.65 : 1 1.09 : 1 0.52 : 1 12.07% 3.84% 11.53 13.32 2011-12 1.56 : 1 1.08 : 1 0.37 : 1 11.47% 4.38% 14.62 16.92

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Break Even Analysis

BEP In Units = 64,16,140 (units)

BEP IN RUPEES = 2,84,87,662 (Rs.) Break Even Point will be achieved in 10.6 Months

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Thank You ???

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