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Study and Action Plan for Promoting Downstream Plastic Processing & Allied Industries

On Assam Gas Cracker Project


Final Report- Volume II (Project Profiles)

Mott MacDonald
NEDFi

North Eastern Development Finance Corporation Limited


Basundhara Enclave
B.K.Kakati Road, Ulubari
Guwahati
Assam- 781007

Study and Action Plan


for Promoting
Downstream Plastic
Processing & Allied
Industries
on the Assam Gas
Cracker Project
Final Report- Volume II
(Project Profiles)
October 2009

Mott MacDonald
A-20, Sector-2,
NOIDA-201301
Tel: +91 120 2543582-85
Fax: +91 120 2543562

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Study and Action Plan for Promoting Downstream Plastic Processing & Allied Industries
On Assam Gas Cracker Project
Final Report- Volume II (Project Profiles)

Mott MacDonald
NEDFi

Study and Action Plan


for Promoting
Downstream Plastic
Processing & Allied
Industries
on the Assam Gas
Cracker Project
Final Report- Volume II
(Project Profiles)

Issue and Revision Record


Rev

Date

01

8th May
2009
th

02

5 October
2009

Originator

Checker

Approver

Description

Iram
Abdullah,
Archana
Chandrikadevi
Iram
Abdullah,
Archana
Chandrikadevi

Anisur
Rahman,

Shoma
Majumdar

Draft Report- Volume II


Project Profiles

Iram Abdullah
Anisur
Rahman, Iram
Abdullah

Shoma
Majumdar

Final Report- Volume II


Project Profiles

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Study and Action Plan for Promoting Downstream Plastic Processing & Allied Industries
On Assam Gas Cracker Project
Final Report- Volume II (Project Profiles)

Mott MacDonald
NEDFi

This document has been prepared for the titled project or named part thereof and should not be relied upon or used for any
other project without an independent check being carried out as to its suitability and prior written authority of Mott
MacDonald being obtained. Mott MacDonald accepts no responsibility or liability for the consequence of this document
being used for a purpose other than the purposes for which it was commissioned. Any person using or relying on the
document for such other purpose agrees, and will by such use or reliance be taken to confirm his agreement to indemnify
Mott MacDonald for all loss or damage resulting therefrom. Mott MacDonald accepts no responsibility or liability for this
document to any party other than the person by whom it was commissioned.
To the extent that this report is based on information supplied by other parties, Mott MacDonald accepts no liability for any
loss or damage suffered by the client, whether contractual or tortious, stemming from any conclusions based on data
supplied by parties other than Mott MacDonald and used by Mott MacDonald in preparing this report.

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Study and Action Plan for Promoting Downstream Plastic Processing & Allied Industries
On Assam Gas Cracker Project
Final Report- Volume II (Project Profiles)

List of Contents

Mott MacDonald
NEDFi

Page

Chapters and Appendices

Project Profiles

Pond/Canal Lining

Disposable Syringes

11

Drip Irrigation System

18

Geo-Textiles

24

Greenhouse Film

33

HDPE Pipes

39

Moulded Furniture

46

Pre-fill PP Polymer

52

10

Toys

58

11

Woven Sacks

64

12

HDPE Mug, Bucket, Containers and PP Comb

70

13

HDPE Small Bottles and Containers

77

14

HDPE Mosquito Nets

83

15

LLDPE Bio-Degradable Sheets/Carry Bags

88

16

PP Blow Moulded Plastic Products

94

17

Moulded Luggage

100

18

Synthetic Wood

105

19

LLDPE Multi-layer Film

111

20

Water Tanks

117

21

Plastic Crates

123

22

Tarpaulins and Covers

130

23

Bi-Axially Oriented Polypropylene (BOPP) Films

138

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Study and Action Plan for Promoting Downstream Plastic Processing & Allied Industries
On Assam Gas Cracker Project
Final Report- Volume II (Project Profiles)

Mott MacDonald
NEDFi

24

Leno Bags

145

25

Ropes

150

26

PP Disposable Plastic Cups/ Glasses

156

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Study and Action Plan for Promoting Downstream Plastic Processing & Allied Industries
On Assam Gas Cracker Project
Final Report- Volume II (Project Profiles)

Mott MacDonald
NEDFi

Project Profiles

As detailed in Volume I of the report, as part of our Scope of Work for the Study and Action Plan for
Promoting Downstream Plastic Processing and Allied Industries, we have prepared the Product
Profiles for the following products:
1. Pond/Canal Lining
2. Disposable Syringes
3. Drip Irrigation Systems
4. Geo-Textiles
5. Greenhouse Film
6. HDPE Pipes
7. Moulded Furniture
8. Pre-fill PP Polymer
9. Toys
10. Woven Sacks
11. HDPE Plastic Combs, Buckets, Mugs etc.
12. HDPE Small Bottles, Small Containers
13. HDPE Mosquito Nets
14. LLDPE Biodegradable Sheets and Carry Bags
15. PP Blow Moulded Plastic Products
16. Moulded Luggage
17. Synthetic Wood
18. LLDPE Multi-layer Film
19. Water tanks
20. Plastic Crates
21. Tarpaulins and Covers
22. BOPP Films
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Study and Action Plan for Promoting Downstream Plastic Processing & Allied Industries
On Assam Gas Cracker Project
Final Report- Volume II (Project Profiles)

Mott MacDonald
NEDFi

23. Leno Bags


24. Ropes
25. PP Disposable Plastic Cups/Glasses
The subsequent sections of this report cover the project profiles of the above listed products.

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Study and Action Plan for Promoting Downstream Plastic Processing & Allied Industries
On Assam Gas Cracker Project
Final Report- Volume II (Project Profiles)

Pond/Canal Lining

2.1

Introduction

Mott MacDonald
NEDFi

Geo-synthetics is the collective term applied to thin, flexible, sheets of material incorporated in or
within soil to enhance its engineering performance. Applications of geo-synthetics mainly fall within
the domain of civil engineering applications. Geo-synthetics as a separate market segment have been
developed and being used at an increasing pace for a greater number of geotechnical applications. The
specific families of geo-synthetics are focused on different categories, such as, geo-textiles, geo-grid,
geo-nets, geo-membranes, geo-synthetic clay liners, geo-pipe, geo-composites and others.
Geo-membranes are a type of geo-synthetic material. They are impermeable membranes used widely
as cut-offs and liners. Until recent years, geo-membranes were used mostly as canal and pond liners.
Geo-membranes are made of various materials. Some common geo-membrane materials are Linear
Low-Density Polyethylene (LDPE), High-Density Polyethylene (HDPE), Polyvinyl Chloride (PVC),
Polyurea and Polypropylene (PP). Another type of geo-membrane is bituminous geo-membrane,
which is actually a layered product of glass and bitumen-impregnated non-woven geo-textile.
In addition to UV and chemical resistance, LLDPE lining sheets exhibit a high degree of flexibility.
Greater flexibility provides increased conformance to subsistence and differential settlement. High
puncture elongation properties make LLDPE liners ideal in applications where conformances to sub
grade irregularities increase the possibility of puncture.
2.2

Market Potential

Geo-membranes are used in the lining of raw water reservoirs, effluent/ desalination/sludge plants,
artificial lagoons/lakes, evaporation pond/leaching pond/ash pond, canals/water storage
tanks/swimming pools. Liners can be made out from Linear Low Density Polyethylene (LLDPE)
fabrics.
In India, research institutions are doing a commendable work in promoting technical textiles,
particularly in the Homotech and Meditech fields but a lot remains to be done. Technical textiles have
a great future in India. Technical textiles do not need any special machinery. China is one of the
manufacturers of this machinery and has allotted almost one full Chinese hinterland solely to the
development of machinery for technical textiles. Even today, there are a few units in India especially
those located in Maharashtra, manufacturing technical textiles in various formats. Units in India, both
existing and those in the pipeline can be assured of sustained demand in various fields going by the
economic activity in India.
The Geo-technical textiles market which includes geo-textiles, geo-membranes and civil engineering
textiles was estimated to be worth Rs. 999 crores in 2005-06 in the country. This market is expected to
grow at about 10% in the coming years.
The Government of India has also extended its support by including technical textile projects under
the Textile Up-gradation Fund Scheme whereby intending units will be assured of both 10% capital
subsidy and a 5% remission in interest rates charged by banks.
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Study and Action Plan for Promoting Downstream Plastic Processing & Allied Industries
On Assam Gas Cracker Project
Final Report- Volume II (Project Profiles)

2.3

Mott MacDonald
NEDFi

Plant Capacity

The production basis for a typical unit would be as under:

Working hours/day: 16 (2 shifts)

Working days in a year: 300

Annual Production capacity: 1000 TPA LLDPE Liners

The unit has been assumed to operate at 70%, 80% and 90% of its installed capacity in the first,
second and third year and at 100% capacity from fourth year onwards of its operation.
2.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

Polyethylene resin is pumped directly from storage silos or from totes on the floor to hoppers which
are placed above the extruder.
Hoppers feed resin into the extruder. The resin is heated to the melting point in the extruder barrel. It
is conveyed through the barrel by the rotation of a specially designed screw which, in conjunction with
heating elements along the barrel, provides consistency to produce a molten polymer stream.
The molten material is forced through a screen pack, which act as a final filter for impurities or
contaminants, and up through a die. It extrudes from the circular die as a film tube (bubble), pulled
vertically by a set of nip rollers located at the top of a cooling tower. An IBC (Internal Bubble
Cooling) unit, part of the extruder, maintains consistent bubble diameter.
At the top of the tower the bubble passes through a collapsing frame and is pulled through the nip
rollers. The material is directed back toward the ground, and continues cooling as it approaches a
winding machine. Before being taken up by the winder, the tube is split and spread to its deployable
width. The winder rolls the finished geo-membrane onto a specially made heavy-duty core.
As the geo-membrane is rolled and cut to length, thickness measurements are made across its full
width and a full roll width sample is taken for QC testing. Tests include density, uni-axial tensile
properties (most significantly break properties), carbon black content and dispersion, Oxidative
Induction Time, and Stress Cracking Resistance. All tests are not be performed on every roll, and each
test is performed at a different frequency. A sample of material is archived for reference purposes.
A QC certificate is prepared for each roll, listing the roll number, the resin lot and all test results
covering that roll. A copy of the certificate for each roll will be sent to the project engineer or the QA
consultant for each project no later than delivery of the roll to the site.
Each roll will be identified with a label showing the product, the roll number, thickness, and length.
Labels will be placed on the outside of the roll at one end and on the outside or inside of both ends of
the core. This enables the roll to be easily identified when stacked on top of or under others.
The Plant & Machinery required for this project includes Hopper, Multi-Layer Co-extrusion Blown
film plant and Cooling Tower
Following is the list of the plant and machinery suppliers:
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Study and Action Plan for Promoting Downstream Plastic Processing & Allied Industries
On Assam Gas Cracker Project
Final Report- Volume II (Project Profiles)

Mott MacDonald
NEDFi

1. SS Mechanical Engineers
WZ-106/56, Rajouri Garden Extn.,
New Delhi-110027
E-MAIL : mail@ssmech.com
2. ALMASS INDUSTRIES
324, Functional Industrial Estate,
Patparganj (Near Anand Vihar),
Delhi 110092
3. DYNAMIC ENGINEERS
Plot No. 35/36/37,
Shri Ram Industrial Estate,
Anup Engineering Compound, G.I.D.C.,
Odhav, Ahmedabad - 382415
2.5

Raw Material & Utilities Requirement

The Raw Material required is LLDPE. We have considered 2% wastage of raw material.
Raw
Material Total Requirement
Requirement
(MTPA)

Cost (Rs./MT)

LLDPE with 2% wastage

71124

Total
Cost

Raw

Total Cost
(Rs. Lakhs/MT)

1020

Material

725
725

The main utilities required are water and power. The total utility cost is Rs. 1.21 Lakhs per annum.
2.6

Land & Built-up Area Requirement

The total land required is 5000 sq.m. and the built-up area is 2000 sq.m.
2.7

Manpower Requirement

Staff

Nos
5

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Study and Action Plan for Promoting Downstream Plastic Processing & Allied Industries
On Assam Gas Cracker Project
Final Report- Volume II (Project Profiles)

Mott MacDonald
NEDFi

Plant Manager

Laboratory Manager

Production Manager

Accountant

Supervisors

Skilled Workers

10

Unskilled Workers

10

Security

Total Manpower Required

30

A margin of 25% has been considered for other benefits for the staff.
2.8

Project Cost/ Fixed Capital Requirement & Means of Finance

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The Total Project Cost is Rs. 335.38 Lakhs as per the table below:

S.No

Cost Head

Building

Machinery

Miscellaneous Fixed Assets

Preliminary and Pre-Operative Expenses

Margin Money for Working Capital

Contingency Expenses

Land Development

Cost (in Rs. Lakhs)


160.00
50.18
43.88
2.00
53.83
15.49
10.00
335.38

Total
The means of finance considering Debt-Equity ratio of 2:1 will be:
Means of Finance

Rs in lakhs
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Study and Action Plan for Promoting Downstream Plastic Processing & Allied Industries
On Assam Gas Cracker Project
Final Report- Volume II (Project Profiles)

Mott MacDonald
NEDFi

Equity

111.78

Debt

223.60
335.38

Total
2.9

Working Capital Requirement

The Total Working Capital Requirement is as under:


Year-1
Net WC
Available Bank Finance
Margin Money
2.10

Year-2

Year-3

Year-4

Year-5

215.33

246.10

276.86

307.62

307.62

161.50

184.57

207.64

230.71

230.71

53.83

61.52

69.21

76.90

76.90

Operating Expenses

The Annual Operating expenses for the first year (70% capacity utilization) are given below:
Particulars

Expense(Rs in lakhs)
0.85

Utilities

16.74

Wages & Salaries

33.54

Interest on term loan

24.23

Interest on Bank Finance for Working Capital

507.83

Raw Material

12.77

Depreciation

1.15

Maintenance and Service Charges

597.10

Total
2.11

Profitability Estimates
(Rs. In Lakhs)

S. NO. PARTICULARS

YEAR
Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

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Study and Action Plan for Promoting Downstream Plastic Processing & Allied Industries
On Assam Gas Cracker Project
Final Report- Volume II (Project Profiles)

Mott MacDonald
NEDFi

Production/Sales
Installed Capacity
Capacity Utilization
Estimated Production
Gross Sales Revenue

1000

1000

1000

1000

1000

70%

80%

90%

100%

100%

700

800

900

1000

1000

840

960

1080

1200

1200

508

580

653

725

725

24

24

24

24

24

17

17

17

17

17

21

24

27

30

30

45

45

45

45

45

616

692

767

843

843

224

268

313

357

357

34

28

21

14

24

28

31

35

35

58

55

52

48

42

12.8

12.8

12.8

12.8

12.8

153

200

248

295

302

50

66

82

98

100

102

134

166

198

203

Expenses
Raw Material Consumption
Utilities
Administrative Overheads
Salaries
Sales Expenses
Loan Repayment
Maintenance Charges
TOTAL
GROSS PROFIT
Financial Expenses
Interest On Term Loan
Interest
Capital

On

Working

Sub Total
Depreciation
Profit Before Tax
Provision For Tax
Profit After Tax
2.12

Financial Indicators

The Average Break Even Point for the project is 40%.


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Study and Action Plan for Promoting Downstream Plastic Processing & Allied Industries
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Final Report- Volume II (Project Profiles)

Mott MacDonald
NEDFi

(Rs. In Lakhs)

Sales Realisation

Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

840

960

1080

1200

1200

21

21

21

21

21

21

24

27

30

30

13

13

13

13

13

24

24

24

24

24

45

45

45

45

45

34

28

21

14

158

155

151

147

140

508

580

653

725

725

24.23

27.69

31.15

34.61

34.61

532

608

684

760

760

308

352

396

440

440

51%

44%

38%

34%

32%

Fixed Costs
Salaries
Fixed Selling Expenses
Depreciation (SLM)
Utilities (Fixed)
Admin. Overheads
Loan Repayment
Interest On L.T. Loan
Total Fixed Costs
Variable Cost
Raw Materials
Interest On Working Capital Loan
Total Variable Costs
Contribution
Breakeven In %
Average BEP

40%

The IRR for the project is 18.9%, Average ROI is 81% and average DSCR is 3.10.
(Rs. In Lakhs)
Particulars

Revenue

Year of Operation
1

840

960

1080

1200

1200

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Profit Before Tax


Profit After Tax
LT Interest
Depreciation
LT Loan Repayment
Return on Investment (%)
Average ROI

Mott MacDonald
NEDFi

152.81

199.62

247.54

295.47

302.40

102.39

133.75

165.85

197.96

202.61

33.54

27.73

20.79

13.86

6.93

12.77

12.77

12.77

12.77

12.77

44.72

44.72

44.72

44.72

44.72

59%

72%

84%

96%

96%

81%

Debt-Service Coverage Ratio


- Debt Service

78.26

72.45

65.51

58.58

51.65

- Coverage

148.70

174.25

199.42

224.60

222.31

1.90

2.41

3.04

3.83

4.30

DSCR
Average DSCR

3.10

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Study and Action Plan for Promoting Downstream Plastic Processing & Allied Industries
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Final Report- Volume II (Project Profiles)

Disposable Syringes

3.1

Introduction

Mott MacDonald
NEDFi

Disposable Syringes are made of plastic material and are used in medical and veterinary science. Due
to their availability in sterilized condition, ready to use and cost effectiveness, disposable syringes are
fast replacing the age-old glass syringes. Moreover, the horror of AIDS worldwide has almost
dispensed with the reuse of syringes and the demand of disposable syringe has increased
phenomenally. Disposable syringes are mostly injection moulded from polypropylene. Syringes are
available in sizes of 1 ml, 2ml, 5 ml, and 10 ml, in a variety of designs and consist of either two or
three components in their material of construction. The number and size of injection moulding
machines required depends upon syringe construction, number of mould cavities and annual
production.
3.2

Market Potential

Disposable syringes have already penetrated the domestic market in a significant way because of
awareness created by the Government and other non-governmental organisations on AIDS and
Hepatitis-B, thereby insisting on the use of disposable syringes instead of conventional glass type
syringes. There is lot of scope in the local market, even if we assume a usage rate of 1 syringe per
annum per person, the demand would be of the order of over 102 crores syringes per annum.
Disposable syringes have wide market potential. The age-old glass syringes are fast becoming
obsolete. Some of the units manufacturing this product in the country include:
Steryware, Faridabad; Cadila; Dispovan, Faridabad; Cadila hospital product, Ahmedabad; Surgiplus,
Ahmedabad; Transplastic Pondicherry; Disposable Mediate, Chennai; Suru Chemicals, Mumbai;
Albert David, M.P.; Manoj Surgical, Indore. Some of these units are 100% export-oriented units. In
view of the fast expanding market, the prospects of disposable syringes are very bright.
3.3

Plant Capacity

The production basis for a typical unit would be as under:

Working hours/day: 16 (2 shifts)

Working days in a year: 300

Annual Production capacity:

S.No.

Size

Nos.

Weight

Total PP required (MTPA)

1.

2 ml

100,000,000

2.5 g

250

2.

5 ml

55,555,556

4.5 g

250

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Study and Action Plan for Promoting Downstream Plastic Processing & Allied Industries
On Assam Gas Cracker Project
Final Report- Volume II (Project Profiles)

Mott MacDonald
NEDFi

The unit has been assumed to operate at 80% of its installed capacity in the first and second year, 90%
in the third year and 100% capacity from 4th year onwards of its operation.
3.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

The manufacturing process for disposable syringes consists of the following steps:
1. Moulding of the various components
2. Graduation of the moulded parts
3. Assembling
4. Sterilization
5. Quality Control Tests
6. Packaging
The two essential parts to be moulded include cylinder or barrel of the syringe and the plunger or
piston. Injection moulding is suitable for production of large quantity of similar shapes, hence the
syringes are injection moulded.
The raw material polypropylene is fed into the injection moulding machine and moulded in chilled
condition to get better clarity. The moulded syringes are then assembled with the needle in automatic
assembly machine (this profile however deals only with the production of the injection moulded
component of the syringe). The whole assembly is then sterilized in sterilization plant using ethylene
oxide. The completed syringe is then blister packed in automatic packing machine.
The product should conform to drug control specification and drug license should be obtained for
production of this item.
List of Plant & Machinery suppliers is as under:
1. DGP Windsor India Limited
5403, SIDC Industrial Estate,
Place IV, Vatva,
Ahmedabad
2. Central Machinery & Plastic Products
Lojya Estate, Mogra Raod
Andheri (E),
Mumbai - 400 069
3. M/s. Sunanda Industrial Machinery
A Division of Mafatlal
Marg Industries Ltd.
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Study and Action Plan for Promoting Downstream Plastic Processing & Allied Industries
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Final Report- Volume II (Project Profiles)

Mott MacDonald
NEDFi

109, Standard House,


83, Maharshi Karup Road,
Mumbai-400002.
3.5

Raw Material & Utilities Requirement

The main raw material required for the project is Polypropylene (PP) while Polyethylene (PE) is
required for packaging. PP required would be around 525 MT at 100% capacity utilisation. Rubber
Gaskets are also required which will be outsourced.
The major utilities required are water, compressed air and power. Water required is around 590 KLPA.
and power required is 200 KW.
3.6

Land & Built-up Area Requirement

The total land required is 1000 sq.m. and the built-up area is 400 sq.m.
3.7

Manpower Requirement & Project Implementation Schedule

Staff
Production Manager
Accountant
Chemist
Sales Executive
Operators
Skilled Workers
Unskilled Workers
Security
Total Manpower Required

Nos
2
1
2
2
10
10
10
4
41

Project implementation will take a period of 8 months from the date of approval of the scheme. Breakup of activities with relative time for each activity is shown below:
S.No.

Nature of Activities

Period (Month)

Scheme Preparation and approval

0-1

Provisional registration

1-2

Sanction of loan

2-3

Clearance from Pollution Control Board

2-5

Placement of order for delivery of machine

3-4

Installation of machines

4-5

Power connection

6-7

Trial run

6-7

Commencement of production

9 onwards
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3.8

Mott MacDonald
NEDFi

Project Cost/ Fixed Capital Requirement & Means of Finance

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been considered as part
of the Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been
considered as part of operating cost. The total Project Cost is Rs. 395.91 Lakhs as per the table below.
S.No

Cost Head

Cost (in Rs. Lakhs)


32.00

Building

Machinery

Miscellaneous Fixed Assets

Preliminary and Pre-Operative Expenses

Margin Money for Working Capital

Contingency

Land Development

279.47
8.58
2.00
53.10
18.76
2.00
395.91

Total
The means of finance considering Debt-Equity ratio of 2:1 will be:
Means of Finance

Rs (in lakhs)

Equity

131.96

Debt

263.95
395.91

Total
3.9

Working Capital Requirement

The Total Working Capital Requirement is as under:


(Rs in Lakhs)

Particulars

Years of Operation
1

Net WC

212.41

212.41

238.96

265.51

265.51

Available Bank Finance

159.31

159.31

179.22

199.13

199.13

53.10

53.10

59.74

66.38

66.38

Margin Money
3.10

Operating Expenses

The Annual Operating expenses for the first year (70% capacity utilization) are given below:
S.No.
1
2

Particulars

Expenses(Rs in lakhs)
1.68
23.88

Utilities
Wages & Salaries
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3
4
5
6
7

Interest on term loan


Interest on Bank Finance for Working Capital
Raw Material
Depreciation
Maintenance and Annual Charges
Total

3.11

Profitability Estimates

Mott MacDonald
NEDFi

39.59
23.90
491.61
29.93
0.23
610.82

(Rs. In Lakhs)

S. NO.

PARTICULARS

YEAR
Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

Installed Capacity

800

800

800

800

800

Capacity Utilization

80%

80%

90%

100%

100%

Estimated Production

640

640

720

800

800

Gross Sales Revenue

832

832

936

1040

1040

Raw Material Consumption

492

492

553

615

615

Utilities

Administrative Overheads

10

10

10

10

10

Salaries

30

30

30

30

30

Sales Expenses

21

21

23

26

26

Loan Repayment

53

53

53

53

53

Maintenance Charges

0.23

0.23

0.23

0.23

0.23

TOTAL

607

607

671

735

735

GROSS PROFIT

225

225

265

305

305

Interest On Term Loan

40

33

25

16

Interest On Working Capital

24

24

27

30

30

Sub Total

63

57

51

46

38

Depreciation

29.9

29.9

29.9

29.9

29.9

Profit Before Tax

131

138

183

228

237

Provision For Tax

43

46

60

75

78

Profit After Tax

88

93

123

153

158

Production/Sales

Expenses

Financial Expenses

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3.12

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NEDFi

Financial Indicators

The Average Break Even Point for the project is 49%.


(Rs. In Lakhs)

Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

832

832

936

1040

1040

Salaries

30

30

30

30

30

Fixed Selling Expenses

21

21

23

26

26

Depreciation (SLM)

30

30

30

30

30

Utilities (Fixed)

Admin. Overheads

10

10

10

10

10

Loan Repayment

53

53

53

53

53

Interest On L.T. Loan

40

33

25

16

Total Fixed Costs

185

178

173

167

159

Raw Materials

492

492

553

615

615

Interest On Working Capital Loan

24

24

27

30

30

Total Variable Costs

516

516

580

644

644

Contribution

316

316

356

396

396

Breakeven In %

58%

56%

48%

42%

40%

AVERAGE BREAK-EVEN

49%

Sales Realisation
Fixed Costs

Variable Cost

The IRR for the project is 21%, Average ROI is 60% and the average DSCR is 2.38.
(Rs. In Lakhs)
Particulars

Year of Operation
1

832

832

936

1040

1040

Profit Before Tax

131.22

138.08

183.23

228.37

236.55

Profit After Tax

87.92

92.51

122.76

153.01

158.49

LT Interest

39.59

32.73

24.55

16.37

8.18

Depreciation

29.93

29.93

29.93

29.93

29.93

LT Loan Repayment

52.79

52.79

52.79

52.79

52.79

Return on Investment (%)

51%

51%

60%

69%

69%

Average ROI

60%

Revenue

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Debt-Service Coverage Ratio


- Debt Service

92.38

85.52

77.34

69.16

60.97

- Coverage

157.44

155.17

177.24

199.30

196.60

DSCR

1.70

1.81

2.29

2.88

3.22

Average DSCR

2.38

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Drip Irrigation System

4.1

Introduction

Mott MacDonald
NEDFi

Drip irrigation is a slow but even application of low pressure water to soil and plants using plastic
tubing placed directly at the root zone of the plants. Drip irrigation can help use water efficiently. A
well-designed drip irrigation system loses practically no water to runoff, deep percolation, or
evaporation. Drip irrigation reduces water contact with crop leaves, stems, and fruit. Thus, conditions
may be less favourable for the onset of diseases. Irrigation scheduling can be managed precisely to
meet crop demands, holding the promise of increased yield and quality.
Agricultural chemicals can be applied more efficiently with drip irrigation. Since only the crop root
zone is irrigated, nitrogen present in the soil is less subject to leaching losses, and the applied
fertilizers can be used more efficiently. In the case of insecticides, lesser products might be needed.
A wide range of components and system design options is available. Drip tape varies greatly in its
specifications, depending on the manufacturer and its use. The distribution system, valves, and pumps
must match the supply requirements of the tape. Tape, depth of tape placement, distance between
tapes, emitter spacing and flow, and irrigation management systems must be chosen carefully based on
crop water requirements and the soil properties. Drip tubing rather than drip tape is usually used for
perennial crops such as grapes or poplar trees. Drip irrigation system delivers water to the crop using a
network of mainlines, sub-mains and lateral lines with emission points spaced along their lengths.
Each dripper/emitter orifice supplies a measured, precisely controlled uniform application of water,
nutrients, and other required growth substances directly into the root zone of the plant.
Water and nutrients enter the soil from the emitters, moving into the root zone of the plants through
the combined forces of gravity and capillary. In this way, the plants withdrawal of moisture and
nutrients are replenished almost immediately, ensuring that the plant never suffers from water stress,
thus enhancing quality, its ability to achieve optimum growth and high yield.
4.2

Market Potential

The use of drip irrigation is rapidly increasing around the world, and this trend is expected to continue
in the foreseeable future. With increasing demand on limited water resources and the need to minimise
environmental consequences of irrigation, drip irrigation technology offers many advantages. The use
of drip irrigation in India has increased rapidly from the time of initial testing at Tamil Nadu
University in Coimbatore in 1970 to all-India coverage of 55,000 hectares by 1992 and is now
estimated to be 225,000 hectares. Studies of comparative crop yield and water use for surface and
conventional drip irrigation of different crops carried out at agricultural universities in India have
consistently found water savings of 30-60% and yield increase of 20-40 % favouring drip irrigation
over surface irrigation methods. The Indian Committee on Irrigation and Drainage estimates the
potential for drip irrigation in India of 10.5 million hectares.
4.3

Plant Capacity

The production basis for a typical unit would be as under:


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Working hours/day: 8 (1 shift)

Working days in a year: 300

Annual Production capacity: 600 TPA HDPE pipes and 400 TPA of LLDPE valves and
fittings.

The unit has been assumed to operate at 75%, 80% and 90% of its installed capacity in the first,
second and third year and at 100% capacity from fourth year onwards of its operation.
4.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

A process for making low cost drip irrigation lines comprises molding a drip emitter having an
elongated labyrinth channel formed in the depth of the emitter body. Emitters of other configurations
also can be used in the process. A plastic film is extruded and passed through a film die with an air
injection tube at one end forming a plastic film bubble. At the bottom of the extruded plastic film
bubble, a pair of pressure rolls join opposite faces of the bubble to form a continuous unitary extruded
plastic film sheet. The emitters are moved in series towards the nip of the pressure rolls and are
inserted in sequence with their labyrinth faces facing toward the hot bubble. The emitters are bonded
to the extruded film sheet using the heat of extrusion, and the external sheet forms one face of the
labyrinth channel through each emitter. After laminating the emitter to the extruded film, an exit hole
is formed through the film to each emitter and the film is then wrapped and bead sealed to form a
continuous flexible drip irrigation tube with the emitters spaced apart along the inside of the tube. The
process can be used for making multiple drip irrigation lines in parallel along a single extruded plastic
film sheet.
The Machinery required is as under:
Machinery cost of Drip Irrigation project

Cost in Rs.

Blenzor IJM 1000 Injection Moulding Machine


50 MM PIPE PLANT
Max. Extrusion Output: 50 kgs./hr.

5,75,000/9,00,000/

Machinery Suppliers:
1. SS Mechanical Engineers,
WZ-106/56, Rajouri Garden Extn.,
New Delhi-110027
E-MAIL : mail@ssmech.com
2. Blenzor ( India )
1-A,First Floor,
Sharda Mansion,
Dr.Babasaheb Ambedkar Road,
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Dadar East, Mumbai-400014


4.5

Raw Material & Utilities Requirement

The raw material required for the project is HDPE for making pipes and LLDPE for the valves and
fittings. The raw material required would be around 612 MT of HDPE and 408 MT of LLDPE at
100% capacity utilisation.
The major utilities required are water and power. Water required is around 460 KLPA. and power
required is 150 KW.
4.6

Land & Built-up Area Requirement

The total land required is 1500 sq.m. with the built-up area of 600 sq.m.
4.7

Manpower Requirement

Staff

Nos

Plant Manager

Maintenance Manager

Production Manager

Accountant

Supervisors

Skilled Workers

10

Unskilled Workers

10

Security

Total Manpower Required

32

4.8

Project Cost/ Fixed Capital Requirement & Means of Finance:

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The Total Project Cost is Rs. 190.49 Lakhs as per the table below:
S.No

Cost Head

Building

Machinery

Miscellaneous Fixed Assets

Preliminary and Pre-Operative Expenses

Margin Money for Working Capital

Cost (in Rs. Lakhs)


24.00
63.00
44.50
2.00
47.92
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Contingency Expenses

Land Development

Mott MacDonald
NEDFi

9.07
3.00
190.49

Total
The means of finance considering Debt-Equity ratio of 2:1 will be:
Means of Finance

Rs in lakhs

Equity

63.49

Debt

127.00
190.49

Total
4.9

Working Capital Requirement

The Total Working Capital Requirement is given below:


Particulars

Years of Operation
1

Net WC

191.70

204.48

230.03

255.59

255.59

Available Bank Finance

143.77

153.36

172.53

191.70

191.70

Margin Money

47.92

51.12

57.51

63.90

63.90

4.10

Operating Expenses

The Annual Operating expenses for the first year (75% capacity utilization) are given below:
Particulars

Expense(Rs in lakhs)
0.64

Utilities

17.94

Wages & Salaries

19.05

Interest on term loan

21.57

Interest on Bank Finance for Working Capital

528.20

Raw Material

9.46

Depreciation

0.35

Maintenance Charges

597.21

Total

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4.11

Mott MacDonald
NEDFi

Profitability Estimates
(Rs. In Lakhs)

S. NO.

PARTICULARS

YEAR
Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

Installed Capacity of HDPE Pipes

600

600

600

600

600

Installed Capacity of LLDPE valves and fittings

400

400

400

400

400

Capacity Utilization

75%

80%

90%

100%

100%

Estimated Production of Pipes

450

480

540

600

600

Estimated Production of Valves and Fittings

300

320

360

400

400

Gross Sales Revenue

720

768

864

960

960

528

563

634

704

704

Utilities

Administrative Overheads

10

10

10

10

10

Salaries

18

18

18

18

18

Sales Expenses

18

19

22

24

24

Loan Repayment

25

25

25

25

25

Maintenance Charges

0.35

0.35

0.35

0.35

0.35

TOTAL

600

637

709

782

782

GROSS PROFIT

120

131

155

178

178

Interest On Term Loan

19

16

12

Interest On Working Capital

22

23

26

29

29

Sub Total

41

39

38

37

33

Depreciation

9.5

9.5

9.5

9.5

9.5

Profit Before Tax

70

83

107

132

136

Provision For Tax

23

27

35

43

45

Profit After Tax

47

56

72

88

91

Yr -4

Yr-5

Production/Sales

Expenses
Raw Material Consumption

Financial Expenses

4.12

Financial Indicators

The Average Break Even Point for the project is 51%.


Yr -1

Yr-2

Yr -3

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720

768

864

960

960

Salaries

22

22

22

22

22

Fixed Selling Expenses

18

19

22

24

24

Depreciation (SLM)

Utilities (Fixed)

Admin. Overheads

10

10

10

10

10

Loan Repayment

25

25

25

25

25

Interest On L.T. Loan

19

16

12

Total Fixed Costs

105

102

101

99

95

Raw Materials

528

563

634

704

704

Interest On Working Capital Loan

22

23

26

29

29

Total Variable Costs

550

586

660

733

733

Contribution

170

182

204

227

227

Breakeven In %

61%

56%

49%

44%

42%

Average Break-Even

51%

Sales Realisation
Fixed Costs

Variable Costs

The IRR for the project is 30.8%, Average ROI is 67% and the average DSCR is 2.58.
Particulars

Year of Operation

(Rs. In Lakhs)

1
720

2
768

3
864

4
960

5
960

Profit Before Tax

69.79

83.25

107.48

131.71

135.65

Profit After Tax

46.76

55.77

72.01

88.25

90.89

LT Interest

19.05

15.75

11.81

7.87

3.94

Depreciation

9.46

9.46

9.46

9.46

9.46

LT Loan Repayment

25.40

25.40

25.40

25.40

25.40

Return on Investment (%)

52%

57%

68%

78%

78%

Average ROI

67%

Revenue

Debt-Service Coverage Ratio


- Debt Service

44.45

41.15

37.21

33.27

29.34

- Coverage

75.27

80.98

93.28

105.58

104.28

DSCR

1.69

1.97

2.51

3.17

3.55

Average DSCR

2.58

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Geo-Textiles

5.1

Introduction

Mott MacDonald
NEDFi

Geo-synthetics is the collective term applied to thin, flexible, sheets of material incorporated in or
within soil to enhance its engineering performance. Applications of geo-synthetics mainly fall within
the domain of civil engineering applications. Geo-synthetics as a separate market segment has been
developed and being used at an increasing pace for a greater number of geotechnical applications. The
specific families of geo-synthetics are focused on different categories such as, geo-textiles, geo-grid,
geo-nets, geo-membranes, geo-synthetic clay liners, geo-pipe, geo-composites and others.
Geo-textiles form one of the two largest groups of geo-synthetics, which are textile fabrics (woven,
non-woven, knitted, braided, etc) specially designed to be used as construction material in conjunction
with other geotechnical materials such as soil and rock in applications of civil engineering nature.
There are at least hundred specific application areas for geo-textiles; however, the fabric always
performs at least one of five discrete functions, namely separation, reinforcement, filtration, drainage
and protection.
5.2

Market Potential

The current major use of geo-textiles is within the foundation components or load-supporting part of a
civil engineering structure. More recently geo-textiles have been used to enhance tensile properties of
civil engineering materials themselves, such as road surface and sub surfaces in both construction of
new and renovation of old highways, mattresses for erosion control etc.
Basically, all available geo-textiles can be broadly classified on the basis of manufacturing techniques
namely woven, non-woven and knitting. Whereas the initial demand of geo-textiles were met by
woven fabrics, the spurt in demand of geo-textiles was observed only on introduction of non-woven
geo-textiles in the market because they are more flexible and deformable.
According to a Study conducted by Freedonia Group, Spunbonded nonwovens would remain the
dominant product, accounting for half of the total volume of non-wovens in 2009. Approximately 65%
of hygiene product components, which include coverstocks, backsheet use spunbond nonwovens.
The total non-woven production in India was estimated to be around 58,000 tons in 2005 out which
14%, i.e 8000 tons was made through spunbond technology (as shown in the chart below) which was
consumed as durables for manufacturing of interlinings, carpets and geotextiles.
The two major producers of PP non woven spunbond fabric are:
 Unimin India Ltd., Mumbai
 PVD Plast Mould Industries Ltd., Mumbai (now known as Fiberworld (India) Limited)
These units are 100% EOU, having present production capacity of 3,000 TPA and 3,500 TPA
respectively.
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Hence, at present the entire requirement of spunbond fabric for personal hygiene products and
healthcare textiles is met through imports from countries like China, Brazil, Korea and Taiwan.
5.3

Plant Capacity

The production basis for a typical unit would be as under:

Working hours/day: 16 (2 shifts)

Working days in a year: 300

Annual Production capacity: 2000 TPA of non-woven PP geotextiles

The unit has been assumed to operate at 70%, 80% and 90% of its installed capacity in the first,
second and third year and at 100% capacity from fourth year onwards of its operation.
5.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

One of the techniques to manufacture non-woven fabric is Spun-bonding. Spun-bond fabrics are
produced by depositing extruded, spun filaments onto a collecting belt in a uniform random manner
followed by bonding the fibers.
The spun-bond fabric consumption is divided into two segments viz disposables and durables. The
disposables consume about 55-65% of the spun-bond fabric and the rest 35-45% is consumed in
making durables. Geo-textiles fall under the category of durables.
For production of high quality, needle-punched, staple fibre geo-textiles, continuous filaments of
polypropylene are extruded on a fibre extrusion line. Fibres are then cut, opened and laid into a web.
They then pass through thousands of needles that penetrate and orient the fibres, locking them with
one another. After this they are heat-set and rolled to create non-woven geo-textiles.
This manufacturing process is detailed out further as below:

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The spunbond nonwoven process consists of several integrated steps for conversion of polymer or
resin chips into finished fabric. The major steps of the process are:
Polymer Feed - Polymer feedstock in pellet or powder form is conveyed from storage bins or silos to
the feeder section of an extruder.
Extruder - Polymer feedstock is mixed with stabilizers, additives, color master-batch, resin modifiers,
or other additives. This blend of raw materials is melted within the extruder barrel.
Fiber Spinning - The molten polymer mix is pumped through a heated conduit to a resin filter system
and then to a distributor section that leads to the spinnerette units. The spinnerette usually consists of a
perforated plate arranged across the width of the line. The resin is forced through the many small holes
in the spinnerette plate to form continuous filaments.
Quenching / Attenuation Zone - As the filaments emerge through the spinnerette holes, they are
directed downward into quench chambers or chimneys. As the filaments travel through these
chambers, cool air is directed across the filament bundle to cool the molten filaments sufficiently to
cause solidification. The filaments are then led further downward into a tapered conduit by an
airsteam. A second stream of high velocity air is directed parallel to the direction of the filaments,
causing an accelerated and accompanying attenuation or stretching of the individual filaments. This
mechanical stretching results in increased orientation of the polymer chains making up the continuous
filament. Such orientation leads to increased filament strength, along with modification of other
filament properties, including the filament denier or thickness.
Web Forming - The filaments are deposited in a random manner on a moving, porous forming belt. A
vacuum under the belt assists in forming the filament web on the forming belt and in removing the air
used in the extrusion / orientation operation. In some processes, an electrostatic charge is placed on the
filament bundle to ensure spreading and separation of individual filaments. In other processes,
deflector plates are used to lay down the filament sheet in a random manner on the forming belt.
Bonding -The continuous filament web is delivered to a bonding section, where one of several
bonding methods can be used to bond the loose filaments into a strong, integrated fabric.
Slitting / Winding - The bonded fabric encounters a slitting section where the two edges are trimmed
to eliminate the non-uniform, rough edge created during the manufacturing step. In some operations,
the fabric may also be further slit into precise, smaller widths to provide finished rolls of precise
dimension. Following slitting, the fabric is wound onto a larger roll, either a full width roll or a series
of narrow slit rolls. From this point, the fabric rolls are ready for wrapping and shipping.
The machinery required is as under:
S. No.

Machinery

Product Output

Number required

Leftover opener

50-80 kg/hr

Fine-Opener

30-180 kg/hr

Feeder

60-180 kg/hr

Carding Machine

60-180 kg/hr

Cross Lapper

20-40 m/min

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Pre-Needle machine

1-6 m/min

Main-Needle M/C

1-6 m/min

12

Cutting & Coiling Machine

1-15m/min

Geo-textile machinery is not manufactured in large scale in India; hence we have considered the
quotations from Chinese manufacturers. List of Plant & Machinery suppliers is as under:
1. CNBM International Corporation, China
2. Changshu Weicheng Non-woven Equipment Co. Ltd, China
3. Jiangsu Yingyang Non-woven Machinery Co. Ltd, China
We have considered the production line from Changshu Weicheng. The production line produces wide
geo-textiles by needle-punching method, which are widely used in construction fields, such as separate
layer (road foundation & railway foundation, airport foundation, asphalt foundation)protection layer
(reservoirs, channels & tunnels, river and sea bank), filtration layer (drainage)reinforced layer (soil
stabilization, road surface facility), etc.
5.5

Raw Material & Utilities Requirement

The major raw material required for the project is Polypropylene. The raw material required would be
around 2100 MT at 100% capacity utilisation.
The major utilities required are water and power. Water required is around 850 KLPA and power
requirement is 700 KW.
5.6

Land & Built-up Area Requirement, co

The total land required is 10000 sq.m. and the built-up area is 4000 sq.m.
5.7

Manpower Requirement

The organizational structure of the geo-textiles plant is illustrated in Figure 1. The Plant Manager, who
has overall responsibility for quality, ensures that all quality requirements are met. This includes
incoming inspection, process control and product labelling. The Plant Manager is further responsible
for approving raw materials and testing finished products according to ASTM or other industry
standards.

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Staff

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NEDFi

Nos

V.P. (Engineering)
Plant Manager
Maintenance Manager
Laboratory Manager
Production Manager
Accountant
Supervisors
Skilled Workers
Unskilled Workers
Security
Total Manpower Required

1
1
1
1
1
2
4
25
20
3
59

Figure 2 shows the manufacturing quality system under which all geo-textile products should be
manufactured.

5.8

Project Cost/ Fixed Capital Requirement & Means of Finance

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Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The Total Project Cost is Rs. 959.68 Lakhs as detailed below:
S.No.
1
2
3
4
5
6

Cost Head
Building

Cost (in Rs. Lakhs)


320.00

Machinery

424.98

Miscellaneous Fixed Assets

47.63

Preliminary and Pre-Operative Expenses

2.00

Margin Money for Working Capital

119.37

Contingency Expenses

45.70

Land Development
7
Total Cost

20.00
959.68

The means of finance considering Debt-Equity ratio of 2:1 will be:


Means of Finance

Rs in lakhs

Equity

319.86

Debt

639.82
959.68

Total
5.9

Working Capital Requirement

The Total Working Capital Requirement is as under:


(Rs in lakhs)

Particulars

Years of Operation
1

Net WC

477.48

545.70

613.91

682.12

682.12

Available Bank Finance

358.11

409.27

460.43

511.59

511.59

Margin Money

119.37

136.42

153.48

170.53

170.53

5.10

Operating Expenses

The Annual Operating expenses for the first year (70% capacity utilization) are given below:
S.No.
1
2
3
4

Particulars
Utilities
Wages & Salaries
Interest on term loan
Interest on Bank Finance for Working Capital

Expense(Rs in lakhs)
5.82
32.94
95.97
53.72

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5
6
7
Total

Raw Material
Depreciation
Maintenance Charge

5.11

Profitability Estimates

Mott MacDonald
NEDFi

1051.09
39.38
2.30
1281.23

(Rs.in Lakhs)

S. NO.

PARTICULARS

YEAR
Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

Installed Capacity

2000

2000

2000

2000

2000

Capacity Utilization

70%

80%

90%

100%

100%

Estimated Production

1400

1600

1800

2000

2000

Gross Sales Revenue

1890

2160

2430

2700

2700

Raw Material Consumption

1051

1201

1351

1502

1502

Utilities

Administrative Overheads

27

27

27

27

27

Salaries

33

33

33

33

33

Sales Expenses

47

54

61

68

68

Loan Repayment

128

128

128

128

128

TOTAL

1294

1451

1608

1765

1765

GROSS PROFIT

596

709

822

935

935

Interest On Term Loan

96

79

60

40

20

Interest On Working Capital

54

61

69

77

77

Sub Total

150

141

129

116

97

Depreciation

39.4

39.4

39.4

39.4

39.4

Profit Before Tax

407

529

654

779

799

Provision For Tax

134

174

216

257

264

Profit After Tax

272

354

438

522

535

Production/Sales

Expenses

Maintenance Charges

Financial Expenses

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5.12

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NEDFi

Financial Indicators

The Average Break-Even Point for the project is 37%.


(Rs in Lakhs)

Yr -1
1890

Yr-2
2160

Yr -3
2430

Yr -4
2700

Yr-5
2700

Salaries

41

41

41

41

41

Fixed Selling Expenses

47

54

61

68

68

Depreciation (SLM)

39

39

39

39

39

Utilities (Fixed)

Admin. Overheads

27

27

27

27

27

Loan Repayment

128

128

128

128

128

Interest On L.T. Loan

96

79

60

40

20

Total Fixed Costs

385

375

362

349

329

Raw Materials

1051

1201

1351

1502

1502

Interest On Working Capital Loan

53.72

61.39

69.06

76.74

76.74

Total Variable Costs

1105

1263

1420

1578

1578

Contribution

785

897

1,010

1,122

1,122

Breakeven In %

49%

42%

36%

31%

29%

Average BEP

37%

Sales Realisation
Fixed Costs

Variable Cost

The IRR for the project is 23.2%, Average ROI is 76% and the average DSCR is 2.91.
(Rs. In Lakhs)
Particulars

Year of Operation
1
1890

2
2160

3
2430

4
2700

5
2700

Profit Before Tax

406.55

528.61

653.86

779.12

798.95

Profit After Tax

272.39

354.17

438.09

522.01

535.30

LT Interest

95.97

79.34

59.50

39.67

19.83

Depreciation

39.38

39.38

39.38

39.38

39.38

LT Loan Repayment

127.96

127.96

127.96

127.96

127.96

Return on Investment (%)

56%

67%

78%

89%

89%

Average ROI

76%
207.30

187.47

167.63

147.80

Revenue

Debt-Service Coverage Ratio


- Debt Service

223.94

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407.75

472.89

536.98

601.06

594.52

DSCR

1.82

2.28

2.86

3.59

4.02

Average DSCR

2.91

- Coverage

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Greenhouse Film

6.1

Introduction

Mott MacDonald
NEDFi

A greenhouse is a structure with a glass or plastic roof (frequently glass or plastic walls); it heats up
because incoming solar radiation from the sun warms plants, soil, and other things inside the building.
Air warmed by the heat from hot interior surfaces is retained in the building by the roof and wall.
These structures range in size from small sheds to very large buildings.
Greenhouses can be divided into glass greenhouses and plastic greenhouses. Plastics mostly used are
PE film and multi-wall sheet in Poly Carbonate or Acrylic Glass. The use of polymers composite as
cover materials for greenhouse or agricultural films, is growing globally because it can improve
product quality and yield by protecting plants from extreme weather changes, optimizing growth
conditions, extending the growing season and reducing plant diseases. While the films are being made,
various additives and stabilizing agents are employed to provide desired applications including
prevention of thermal oxidation, discoloration in the melt process and improvement of long term heat
and light stability.
6.2

Market Potential

At present the use of greenhouses in agriculture is growing because greenhouses protect crops from
too much heat or cold, shield plants from dust storms and blizzards, and help to keep out pests. Light
and temperature control allows greenhouses to turn barren land into arable land. They are being used
for growing flowers, vegetables, fruits, and tobacco plants.
Their usage and hence demand for LLDPE films for the same is expected to grow because cultivating
in a greenhouse has distinctive advantages like the yield increases by 5 - 15 times or even more, there
is a reduction in labour cost, less fertilizer is required, lesser requirement of water requirement, less
chances of disease attack, thus reduction in disease control cost, they help in cultivating even in
problematic topography, climate and soil conditions, they are easy to operate, maintain & control.
Greenhouse film is mostly produced by LDPE and LLDPE blending. It can also be co-extruded
composite film of LLDPE, LDPE and EVA.
6.3

Plant Capacity

The production basis for a typical unit would be as under:

Working hours/day: 16 (2 shifts)

Working days in a year: 300

Annual Production capacity: 1000 TPA greenhouse film.

The unit has been assumed to operate at 70%, 80% and 90% of its installed capacity in the first,
second and third year and at 100% capacity from fourth year onwards of its operation.
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6.4

Mott MacDonald
NEDFi

Process, Plant & Machinery (Details & List of Machinery Suppliers)

These films are made by a process known as co-extrusion blown film process, in which plastic pellets
or flakes and additives, if any, are premixed, melted into an extruder, propelled into a die which causes
the molten material to flow around a mandrel and emerge through a ring-shaped opening in the form
of a tube. A die with multiple flow channels is used in co-extrusion to form multiple individual layers.
Air is introduced into the tube causing it to expand and bubble. The air is contained in the bubble by
the die at one end and by nip rollers at the other end. Even air pressure is maintained to ensure uniform
thickness of the bubble. Airflow around the outside of the bubble cools and solidifies the melt. The
bubble is stretched to orient the plastic and improve its strength and properties. After solidification, the
film bubble moves into a set of pinch rollers to flatten and roll the material onto a winder.
The machinery required is a co-extrusion blown film plant.
Machinery Suppliers:
1.

SS Mechanical Engineers
WZ-106/56, Rajouri Garden Extn.,
New Delhi-110027
E-MAIL : mail@ssmech.com

2.

Vijayalaxmi Machines Pvt. Ltd.


A-31, Naraina Industrial Area,
Phase - 1, New Delhi - 110 028

3. Shreya Industries, Ahmedabad


B / H 30, Sidhdhpura Estate,
Near Ramol X Road, Phase 4
G. I. D. C, Vatwa, Ahmedabad - 382 445
6.5

Raw Material & Utilities Requirement

The main raw material required is LLDPE. Raw Material requirement at 100% capacity is 1020 MT.
Utilities required are power and water. Around 418 KL of water and 100 KW of power are required.
6.6

Land & Built-up Area Requirement

The total land required is 2000 sq.m. and the built-up area is 800 sq.m.

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6.7

Mott MacDonald
NEDFi

Manpower Requirement

Staff

Nos

Plant Manager

Production Manager

Accountant

Supervisors

Skilled Workers

10

Unskilled Workers

10

Security

Total Manpower Required

29

6.8

Project Cost/ Fixed Capital Requirement & Means of Finance:

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The Total Project Cost is Rs. 220.36 Lakhs as detailed in the table below:

S.No

Cost Head

Building

Machinery

Miscellaneous Fixed Assets

Preliminary and Pre-Operative Expenses

Margin Money for Working Capital

Contingency Expenses

Land Development

Cost (in Rs. Lakhs)


64.00
50.18
44.50
2.00
45.38
10.30
4.00
220.36

Total
The means of finance considering Debt-Equity ratio of 2:1 will be:
Means of Finance

Rs in lakhs

Equity

73.45

Debt

146.91
220.36

Total
6.9

Working Capital Requirement

The Total Working Capital Requirement is given below:

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(Rs. In Lakhs)

Particulars

Years of Operation

Net WC

1
181.52

2
207.46

3
233.39

4
259.32

5
259.32

Available Bank Finance

136.14

155.59

175.04

194.49

194.49

Margin Money

45.38

51.86

58.35

64.83

64.83

6.10

Operating Expenses

The Annual Operating expenses for the first year (70% capacity utilization) are given below:
S.No.
1
2
3
4
5
6
7
Total

Particulars
Utilities
Wages & Salaries
Interest on term loan
Interest on Bank Finance for Working Capital
Raw Material
Depreciation
Maintenance Charge

6.11

Profitability Estimates

Expense(Rs in lakhs)
0.85
15.06
22.04
20.42
507.83
9.61
0.46
576.26

(Rs.in Lakhs)

S. NO.

PARTICULARS

YEAR
Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

Installed Capacity

1000

1000

1000

1000

1000

Capacity Utilization

70%

80%

90%

100%

100%

Estimated Production

700

800

900

1000

1000

Gross Sales Revenue

679

776

873

970

970

Raw Material Consumption

508

580

653

725

725

Utilities

Administrative Overheads

10

10

10

10

10

Salaries

15

15

15

15

15

Sales Expenses

17

19

22

24

24

Loan Repayment

29

29

29

29

29

0.46

0.46

0.46

0.46

0.46

Production/Sales

Expenses

Maintenance Charges

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TOTAL

580

655

730

805

805

GROSS PROFIT

99

121

143

165

165

Interest On Term Loan

22

18

14

Interest On Working Capital

20

23

26

29

29

Sub Total

42

42

40

38

34

Depreciation

9.6

9.6

9.6

9.6

9.6

Profit Before Tax

47

70

93

117

121

Provision For Tax

15

23

31

39

40

Profit After Tax

31

47

62

78

81

Financial Expenses

6.12

Financial Indicators

The Average Break-Even Point for the project is 56%.


(Rs In Lakhs)
Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

679

776

873

970

970

Salaries

19

19

19

19

19

Fixed Selling Expenses

17

19

22

24

24

Depreciation (SLM)

10

10

10

10

10

Utilities (Fixed)

Admin. Overheads

10

10

10

10

10

Loan Repayment

29

29

29

29

29

Interest On L.T. Loan

22

18

14

Total Fixed Costs

107

106

104

102

97

508

580

653

725

725

20.42

23.34

26.26

29.17

29.17

Total Variable Costs

528

604

679

755

755

Contribution

151

172

194

215

215

Breakeven In %

71%

62%

54%

47%

45%

Average Break-Even

56%

Sales Realisation
Fixed Costs

Variable Cost
Raw Materials
Interest On Working Capital Loan

The IRR for the project is 21.2%, Average ROI is 51% and the Average DSCR is 2.02.
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(Rs. In Lakhs)
Particulars

Year of Operation
1

679

776

873

970

970

Profit Before Tax

46.68

69.61

93.28

116.94

121.50

Profit After Tax

31.28

46.64

62.50

78.35

81.40

LT Interest

22.04

18.22

13.66

9.11

4.55

Depreciation

9.61

9.61

9.61

9.61

9.61

LT Loan Repayment

29.38

29.38

29.38

29.38

29.38

Return on Investment (%)

36%

44%

53%

62%

62%

Average ROI

51%

Revenue

Debt-Service Coverage Ratio


- Debt Service

51.42

47.60

43.05

38.49

33.94

- Coverage

62.92

74.47

85.77

97.07

95.57

DSCR

1.22

1.56

1.99

2.52

2.82

Average DSCR

2.02

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HDPE Pipes

7.1

Introduction

Mott MacDonald
NEDFi

Pipes made from Polyethylene (PE) are a cost effective solution to a number of piping problems in
Metropolitan, Municipal, Industrial, Underwater, Mining, Landfill Gas extraction, Cable duct and
agricultural applications. HDPE Pipes are manufactured from High Density Polyethylene. The pipes
are better substitutes for costly Metallic and Non-Metallic pipes like CI, GI, AC, RCC & MS.
HDPE Pipes are generally made black in colour by addition of Carbon Black to protect from ageing
& degradation due to ultraviolet sunrays. They have wide application areas and can be used for
potable water supply, irrigation/agriculture, gas transmission, industrial effluents, telephone cable
ducts, sewerage & drainage, sprinkler system, slurry transportation, chemical industries, tube-wells
etc.
They have the lowest repair frequency per kilometre of pipe per year compared to all other pipe
materials used for urban water and gas distribution. HDPE pipe is actually a superior type

product for many applications. The superiority of HDPE pipes can be seen from the
following properties:

Economical than traditional pipe material.

Resistant to chemicals- external and internal.

Resistant to electrolytic corrosion.

Resistant to rusting and rotting.

Light Weight - One sixth of the weight of steel. Low specific gravity giving an outstanding
light weight product for easy transportation, handling, fitting etc.

Very good thermal insulation due to low thermal conductivity.

Smooth bore provides less head loss. Flow resistance is approximately 30% less than that of
conventional pipes, permitting the use of a smaller bore pipe for a given rate of flow.

Perfect stability for material reduces the risk of ageing.

Fire resistant

Low maintenance cost.

Easy to install.

Longer Life than G.I., M.S. Cement & Other Pipes.

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7.2

Mott MacDonald
NEDFi

Market Potential

There are 2-3 HDPE pipes manufacturers in the NER, with a total consumption of about 20-30 TPM
HDPE, of which about 50% is consumed in Assam. The HDPE pipes are mainly used in household
and agricultural sector. HDPE pipes are used in drip irrigation systems as well as for water and
sewerage. They have a large market potential in the North-East because they can replace the PVC and
GI pipes that are currently and most widely used in the region.
7.3

Plant Capacity

The production basis for a typical unit would be as under:

Working hours/day: 16 (2 shifts)

Working days in a year: 300

Annual Production capacity: 600 TPA laminated HDPE Pipes.

The unit has been assumed to operate at 70%, 80% and 90% of its installed capacity in the first,
second and third year and at 100% capacity from fourth year onwards of its operation.
7.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

When HDPE pipes are made, HDPE granules or pellets are generally fed into a hopper where they are
melted down into HDPE resin. The HDPE resin is then carried through a cylindrical barrel with a
rotating screw and pumped through to the extrusion point, where it is pushed through a circular die
into yet another cylindrical barrel containing a die, an annular channel of clear space where the pipe
will be formed, and an outer shell known as a mandrel. The HDPE is pushed along this die and formed
into the shape of the pipe. The pipe is then drawn off at the end of the extrusion moulding barrel,
cooled and cut to length.
The process is fairly noisy, and needs to be overseen by experienced technicians in order that high
quality HDPE pipes emerge. This is especially true in case HDPE pipes are created from reprocessed
HDPE. Problems can emerge if the HDPE gets too hot when melted, or if friction in the screw is too
great. If the temperature rises too high, then the molecular structure of the HDPE can begin to break
down, reprocessed HDPE is more susceptible to this as it has already undergone one heating process,
which predisposes it to later weaknesses. If the molecular structure of the HDPE begins to fail, then
the structural soundness of the pipe gets compromised.
The machinery required for manufacturing HDPE pipes is as under:
1. Pipe Extrusion Plant (complete with hopper, barrels and dies)
2. Cutter
List of Machinery Suppliers:
1. Green Hose Extrusion Engineering
B-904, Akshardham Towers,
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Nr. Shahibaug Underbridge,


Shahibaug, Ahmedabad-380004
Gujarat
2. Suresh Engineering Works
14 B, Kalyan Vishranti Grah,
2, South Tukoganj
Indore - 452 001,
Madhya Pradesh
3. Umang Engineers
45, Adarsh Estate, Part-1,
Near Johnson Pump, Odhav
Ahmedabad - 382 415
Gujarat
7.5

Raw Material & Utilities Requirement

The raw material required is HDPE. Raw Material requirement at 100% capacity is 612 MT. Utilities
required are power and water. Around 432 KLPA of water and 75 KW of power are required.
7.6

Land & Built-up Area Requirement

The total land required is 5000 sq.m. and the built-up area is 2000 sq.m.
7.7

Manpower Requirement

Staff

Nos

Production Manager

Accountant

Supervisors

Skilled Workers

10

Unskilled Workers

10

Security

Total Manpower Required

30

7.8

Project Cost/ Fixed Capital Requirement & Means of Finance

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The Total Project Cost is Rs. 255.95 Lakhs as per the table below:
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S.No

Cost Head

Building

Machinery

Miscellaneous Fixed Assets

Preliminary and Pre-Operative Expenses

Margin Money for Working Capital

Contingency Expenses

Land Development

Mott MacDonald
NEDFi

Cost (in Rs. Lakhs)


160.00
27.27
16.29
2.00
28.68
11.71
10.00
255.95

Total
The means of finance considering Debt-Equity Ratio of 2:1 is:
Means of Finance
Equity
Debt
Total
7.9

Rs in lakhs
85.31
170.64
255.95

Working Capital Requirement

The Total Working Capital Requirement is given below:


(Rs. In Lakhs)

Particulars

Years of Operation
1

Net WC

114.72

131.11

147.50

163.89

163.89

Available Bank Finance

86.04

98.33

110.62

122.91

122.91

Margin Money

28.68

32.78

36.87

40.97

40.97

7.10

Operating Expenses

The Annual Operating expenses for the first year (70% capacity utilization) are given below:
S.No.
1
2
3
4
5
6
7
Total

Particulars
Raw materials
Utilities
Wages & Salaries
Interest on term loan
Interest on Bank Finance for Working Capital
Depreciation
Maintenance Charges

Expense(Rs in lakhs)
447.20
0.64
14.34
25.60
12.91
9.17
1.15
511

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7.11

Mott MacDonald
NEDFi

Profitability Estimates
(Rs.in Lakhs)

S. NO.

PARTICULARS

YEAR
Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

Installed Capacity

600

600

600

600

600

Capacity Utilization

70%

80%

90%

100%

100%

Estimated Production

420

480

540

600

600

Gross Sales Revenue

567

648

729

810

810

Raw Material Consumption

313

358

402

447

447

Utilities

Administrative Overheads

16

16

16

16

16

Salaries

18

18

18

18

18

Sales Expenses

14

16

18

20

20

Loan Repayment

34

34

34

34

34

Maintenance Charges

TOTAL

397

444

491

537

537

GROSS PROFIT
Financial Expenses

170

204

238

273

273

Interest On Term Loan

26

21

16

11

Interest On Working Capital

13

15

17

18

18

Sub Total

39

36

32

29

24

Depreciation

9.2

9.2

9.2

9.2

9.2

Profit Before Tax

122

159

197

234

240

Provision For Tax

40

52

65

77

79

Profit After Tax

82

106

132

157

161

Production/Sales

Expenses

7.12

Financial Indicators

The Average Break-Even Point for the project is 38%.


(Rs In Lakhs)

Sales Realisation

Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

567

648

729

810

810

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Fixed Costs
Salaries

18

18

18

18

18

Fixed Selling Expenses

14

16

18

20

20

Depreciation (SLM)

Utilities (Fixed)

Admin. Overheads

16

16

16

16

16

Loan Repayment

34

34

34

34

34

Interest On L.T. Loan

26

21

16

11

Total Fixed Costs

118

115

112

109

104

313

358

402

447

447

12.91

14.75

16.59

18.44

18.44

Total Variable Costs

326

373

419

466

466

Contribution

241

275

310

344

344

Breakeven In %

49%

42%

36%

32%

30%

Average Break-Even

38%

Variable Cost
Raw Materials
Interest On Working Capital Loan

The IRR for the project is 20.3%, Average ROI is 84% and the average DSCR is 3.19.
(Rs. In Lakhs)

Particulars

Year of Operation
1

567

648

729

810

810

Profit Before Tax

122.07

158.92

196.62

234.32

239.61

Profit After Tax

81.79

106.47

131.73

156.99

160.54

LT Interest

25.60

21.16

15.87

10.58

5.29

Depreciation

9.17

9.17

9.17

9.17

9.17

LT Loan Repayment

34.13

34.13

34.13

34.13

34.13

Return on Investment (%)

61%

74%

87%

99%

99%

Average ROI

84%

Revenue

Debt-Service Coverage Ratio


- Debt Service

59.73

55.29

50.00

44.71

39.42

- Coverage

116.55

136.80

156.77

176.74

174.99

1.95

2.47

3.14

3.95

4.44

DSCR

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Average DSCR

Mott MacDonald
NEDFi

3.19

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Moulded Furniture

8.1

Introduction

Mott MacDonald
NEDFi

In recent years, furniture is being manufactured using different polymers in place of traditional
material like wood, metal etc. The furniture is manufactured using Injection Moulding Technique. The
main polymer used for manufacturing is Polypropylene although HDPE is also used. Injection
Moulded furniture is easy to handle, has long life and can be attractively coloured and decorated in a
single step manufacturing process only.
There are many variants of injection moulded furniture like chairs either as a single moulded unit or
with metal leg supports in numerous designs, coffee tables, table tops, multi-purpose racks, drawer and
drawer fittings, trolleys, specially designed safe furniture for children, furniture for open pavilions,
auditoria, airport/railway stations etc.
In this profile, the furniture considered is stackable one shot plastic chairs with no metal or any other
base material.
8.2

Market Potential

There are about 550-600 manufacturers of moulded furniture in India, of which about 7-8
manufacturers are based in North-Eastern region. Most of the manufacturers in the region are engaged
in manufacturing of different varieties of chairs such as plastic foldable chairs, baby chairs and garden
chairs. Other manufactured products include tepoys, stools and tables.
Although plastic furniture has the advantage of increased flexibility and ease of handling, the industry
faces a direct competition from traditional wooden furniture and steel furniture. Moreover, the plastic
furniture market is driven by reprocessed/recycled polymer, which offers significant price advantage
over virgin polymer, PP (IM grade). The total requirement of virgin PP in this segment falls in the
range of about 400 TPM, of which about 250-270 TPM is consumed in Assam. The
reprocessed/recycled PP accounts for an additional 400 TPM. This is indicative of the increased
presence of cost effective reprocessed moulded furniture in the NER markets. The past growth of this
industry has been about 15-20%.
8.3

Plant Capacity

The production basis for a typical unit would be as under:

Working hours/day: 16 (2 shifts)

Working days in a year: 300

Annual Production capacity: 1000 TPA processing of PP for manufacturing chairs.

The unit has been assumed to operate at 80%, 85% and 90% of its installed capacity in the first,
second and third year and at 100% capacity from fourth year onwards of its operation.
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8.4

Mott MacDonald
NEDFi

Process, Plant & Machinery (Details & List of Machinery Suppliers)

The manufacturing process of injection moulded furniture is very simple. The PP granules are fed via
a regulated hopper into a homogenous molten mass by application of heat and shearing action of a
continuously rotating extruded screw which also pushes the plastic melt forward. The melt gets
collected at the forward end of the extruder cylinder and is pushed into the mould cavity by the screw
which now acts as a hydraulic piston.
The mould is kept at a pre-specified temperature and once injected, the plastic melt is held under high
pressure to ensure that the material reaches all ends of the mould. In furniture moulding, moulds used
have very large depth. A locking force of an order of 1500 tonnes or so is essential to reduce the
wastage. The mould is opened after the plastic melt has solidified sufficiently and the moulded item is
ejected by means of ejector pins or plates. During the cooling cycle in the mould, the extruder screw
prepares another batch of plastic melt, ready to be injected, and thus, the cycle goes on continuously.
The moulded articles usually dont require any finishing operation, except for removal of excess
material, if any. Otherwise, after visual inspection, they are kept for curing for about 40-50 hours and
then despatched.
The machinery required for the plant is Hopper, Injection Moulding Machine, Moulds and Cooling
Plant.
The Plant and machinery Suppliers include:
1. Anu Engineering Works
253/260, 1st Main, Vinayaka Nagar,
Kamakshipalya Industrial Area
Mumbai- 560079
2. Ace Automation,
228/1, M. G. R. Street,
Sivanandapuram, Saravanampatti
Coimbatore - 641 035
3. G.S Azad Industry
A-31, Nariana Industrial Area Phase I
New Delhi - 110 028

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8.5

Mott MacDonald
NEDFi

Raw Material & Utilities Requirement

The raw material used, include PP (Injection Moulded Grade), which is the most popularly used raw
material for injection moulded furniture. Apart from PP, some additives and stabilizers are also
required.
Major utilities required are electricity, cooling water and compressed air.
8.6

Land & Built-up Area Requirement

The total land required is 1000 sq.m. and the built-up area is 400 sq. m.
8.7

Manpower Requirement

Staff

Nos

Production Manager

Accountant

Supervisors

Skilled Workers

10

Unskilled Workers

15

Security

Total Manpower Required

34

8.8

Project Cost/ Fixed Capital Requirement & Means of Finance

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The Total Project Cost is Rs. 295.14 Lakhs with the following break-up:
S.No

Cost Head

Building

Machinery

Miscellaneous Fixed Assets

Preliminary and Pre-Operative Expenses

Margin Money for Working Capital

Contingency Expenses

Land Development

Cost (in Rs. Lakhs)


32.00
167.25
22.13
2.00
57.71
14.05
2.00
295.14

Total
The means of finance considering Debt-Equity Ratio of 2:1 will be:
Means of Finance

Rs in lakhs
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Equity

98.37

Debt

196.77
295.14

Total
8.9

Working Capital Requirement ( in Rs Lakhs)

The Total Working Capital Requirement is given below:


Particulars

Years of Operation

Net WC

1
230.85

2
245.28

3
259.70

4
288.56

5
288.56

Available Bank Finance

173.14

183.96

194.78

216.42

216.42

Margin Money

57.71

61.32

64.93

72.14

72.14

8.10

Operating Expenses

The Operating Expenses for the first year of operation i.e. at 80% capacity utilisation are as under:
Sl No

Particulars

Expense(Rs in lakhs)
4.15

Utilities

Wages & Salaries

Interest on term loan

Interest on Bank Finance for Working Capital

Depreciation

Raw Materials

Maintenance Charge

15.36
29.52
25.97
17.98
600.63
0.23
693.83

Total
8.11

Profitability Estimates
(Rs. In Lakhs)

S. NO.

PARTICULARS

YEAR
Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

Installed Capacity

1000

1000

1000

1000

1000

Capacity Utilization

80%

85%

90%

100%

100%

Estimated Production (TPA)

800

850

900

1000

1000

Gross Sales Revenue

880

935

990

1100

1100

Raw Material Consumption

601

638

676

751

751

Production/Sales

Expenses
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Utilities

Administrative Overheads

22

22

22

22

22

Salaries

19

19

19

19

19

Sales Expenses

22

23

25

28

28

Loan Repayment

39

39

39

39

39

Maintenance Charges

0.23

0.23

0.23

0.23

0.23

TOTAL

708

746

785

863

863

GROSS PROFIT

172

189

205

237

237

Interest On Term Loan

30

24

18

12

Interest On Working Capital

26

28

29

32

32

Sub Total

55

52

48

45

39

18.0

18.0

18.0

18.0

18.0

Profit Before Tax

99

119

139

174

180

Provision For Tax

33

39

46

57

59

Profit After Tax

66

79

93

117

121

Financial Expenses

Depreciation

8.12

Financial Indicators

The Average Break-Even Point for the project is 51%.


(Rs in Lakhs)
Yr -1
880

Yr-2
935

Yr -3
990

Yr -4
1100

Yr-5
1100

Salaries

19

19

19

19

19

Fixed Selling Expenses

22

23

25

28

28

Depreciation (SLM)

18

18

18

18

18

Utilities (Fixed)

Admin. Overheads

22

22

22

22

22

Loan Repayment

39

39

39

39

39

Interest On L.T. Loan

30

24

18

12

Total Fixed Costs

154

150

146

142

136

601

638

676

751

751

25.97

27.59

29.22

32.46

32.46

Total Variable Costs

627

666

705

783

783

Contribution

253

269

285

317

317

Sales Realisation
Fixed Costs

Variable Cost
Raw Materials
Interest On Working Capital Loan

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61%
51%

Breakeven In %
Average Break-Even

56%

51%

Mott MacDonald
NEDFi

45%

43%

The IRR for the project is 27.3%, Average ROI is 60% and the average DSCR is 2.37.
(Rs. In Lakhs)

Particulars

Year of Operation
1
880

2
935

3
990

4
1100

5
1100

Profit Before Tax

98.97

118.55

139.11

174.14

180.24

Profit After Tax

66.31

79.43

93.21

116.67

120.76

LT Interest

29.52

24.40

18.30

12.20

6.10

Depreciation

17.98

17.98

17.98

17.98

17.98

LT Loan Repayment

39.35

39.35

39.35

39.35

39.35

Return on Investment (%)

50%

55%

59%

69%

69%

Average ROI

60%

Revenue

Debt-Service Coverage Ratio


- Debt Service

68.87

63.75

57.65

51.55

45.45

- Coverage

113.81

121.81

129.48

146.85

144.84

DSCR

1.65

1.91

2.25

2.85

3.19

Average DSCR

2.37

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Pre-fill PP Polymer

9.1

Introduction

Mott MacDonald
NEDFi

The Thermoplastic compounding industry forms a vital interface between resin production and the
plastic converter. Most processors require the polymers they use, to be coloured or modified in some
way (i.e. with the addition of additives such as flame retardants or UV light stabilizers) and in the case
of PVC, all resin has to be compounded before it can be processed. Very few processors carry out their
own compounding; the majority buy in ready compounded material either directly from the polymer
supplier or through independent compounders.
With wide range of application, the demand of the compounds/master-batches continues to grow and
help in increasing the value-addition of the polyolefin. While compounding enhances the properties of
polymers coupled with the reduction in costs, the master-batches provide the desired aesthetics to the
polymer.
9.2

Market Potential

Thermoplastic compounding industry was estimated to be 7 MMT in 2003. It is expected to grow at


around 3% with the shift of processing industry towards Asia, especially China. Major processors are
investing in fresh capacity in this region and this has also promoted compounders to look into
investment in this region. Also, the US market is very matured and rising raw material pricing has
affected the margins of compounders.
Demand for compound in Asia is estimated to be 7.8 MMT in 2004 and the market has been
increasing at an average of nearly 10% per year since 2000.


Compounding industry in India can be broadly classified as:


 Exclusive compounders of PP & the other engineering compounds.
 Producers of compounds & Master-batches.
 Mainly wire & cable Compounders.

The Indian compounding industry scenario has been briefly summarized as below:

Total Installed Capacity

165 KTA

Total production

99 KTA

Capacity Utilization

60%

No. of players

21

Major applications

Automobiles, Appliance, Wire & Cable

Major compounders

Machino Plast, Hydro S&S, Tipco, Zylog Shakun


polymers
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9.3

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Plant Capacity

The production basis for a typical unit would be as under:


Working hours/day: 16 (2 shifts)
Working days in a year: 300
Annual Production capacity: 500 TPA Compounded PP Polymer
The unit has been assumed to operate at 70%, 80% and 90% of its installed capacity in the first,
second and third year and at 100% capacity from the fourth year onwards of its operation.
9.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

Polymer compounds are manufactured by extrusion compounding. In a step-by-step operation,


polymer compounds are made as follows:
 Incorporate additives and then blend the two polymers in a mixer.
 A stable poly blend is obtained by dispersing and stabilizing the system by means of an
appropriate compatibilizer by earlier step
 Alloying of stabilized polymers is done on a compounding extruder with 5 temperature
profiles and removal of volatiles. The screening of the melt is achieved in this step.
 The strands are extruded through a strand die and then cooled by passing through a water bath
and an air knife and then to the strand pelletizer, and collected as pellets at the end of the line.
 The pellets of the compounded polymer alloys thus obtained can be stored for further use or
sale.
The major plant and machinery required for the Compounding project is:
 Twin screw extruders
 Dosing Pumps
 Pelletisers
 Micro Processor based Programmable Logic Control (PLC) system
 Air Compressors
 Chilling Plant
 Hopper Loading System
 Colour matching system
 Pellet wrapping machine
 Material Handling system for RM & Finished goods
 Stand-by DG Sets


The heart of compounding technology is the extruder equipments. The prominent suppliers of
Twin-screw extruders are:

Overseas Suppliers
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 Fressia Macros
 Werner and Pfleidler
 Berstoff
 Buss Co-kneader Extrusion systems
 Thyssen Machinenbau GmbH
 Ferrel Corporation
Domestic Suppliers
 Inventa
 Windsor
 Rubplast
 Interplast
9.5

Raw Material & Utilities Requirement

The raw material required is PP and additives. At 100% capacity utilisation 525 MT of PP and 53 MT
of additives are required. The main utilities are power and water. Around 449 KL of water and 150
KW of power is required per annum.
9.6

Land & Built-up Area Requirement

The total land required is 2000 sq. m. and the built-up area is 800 sq. m
9.7

Manpower Requirement

Staff

Nos

Plant Manager

Laboratory Manager

Production Manager

Accountant

Supervisors

Skilled Workers

10

Unskilled Workers

12

Security

Total Manpower Required

34

9.8

Project Cost/ Fixed Capital Requirement & Means of Finance:

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
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Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The total project cost is Rs. 218.31 Lakhs as per the table below:
S.No

Cost Head

Cost (in Rs. Lakhs)


64.00

Building

Machinery

Miscellaneous Fixed Assets

Preliminary and Pre-Operative Expenses

Margin Money for Working Capital

Contingency Expenses

Land Development

64.67
43.25
2.00
30.18
10.21
4.00

Total

218.31

The means of finance considering Debt-Equity ratio of 2:1 will be:


Means of Finance

Rs in lakhs
72.76

Equity

145.55
218.31

Debt
Total
9.9

Working Capital Requirement

The total working capital requirement is as under:


Years of Operation

Particulars
Net WC

1
120.74

2
137.98

3
155.23

4
172.48

5
172.48

Available Bank Finance

90.55

103.49

116.42

129.36

129.36

Margin Money

30.18

34.50

38.81

43.12

43.12

9.10

Operating Expenses

The Annual Operating Expenses for the first year (70 % capacity utilisation) are as under:
S.No

Particulars

Expense(Rs in lakhs)
1.10

Utilities

Wages & Salaries

Interest on term loan @ 15%

Interest on Bank Finance for Working Capital @ 15%

Raw Material

Depreciation

Maintenance Charges

18.54
21.83
13.58
256.60
9.36
0.46
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321.48

Total
9.11

Profitability Estimates

S. NO. PARTICULARS

YEAR
Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

Installed Capacity

550

550

550

550

550

Capacity Utilization

70%

80%

90%

100%

100%

Estimated Production

385

440

495

550

550

Gross Sales Revenue

481

550

618.75

687.5

687.5

257

293

330

367

367

Utilities

Administrative Overheads

14

14

14

14

14

Salaries

19

19

19

19

19

Sales Expenses

12

14

15

17

17

Loan Repayment

29

29

29

29

29

Maintenance Charges

0.46

0.46

0.46

0.46

0.46

Total

332

370

408

447

447

Gross Profit

150

180

210

241

241

Interest On Term Loan

22

18

14

Interest On Working Capital

14

16

17

19

19

Sub Total

35

34

31

28

24

Depreciation

9.4

9.4

9.4

9.4

9.4

Profit Before Tax

105

137

170

203

208

Provision For Tax

35

45

56

67

68

Profit After Tax

70

92

114

136

139

Production/Sales

Expenses
Raw Material Consumption

Financial Expenses

9.12

Financial Indicators

The average break-even point is 41%.


Particulars
Sales Realisation

(Rs In Lakh)
Yr -1
481

Yr-2
550

Yr -3
619

Yr -4
688

Yr-5
688

23

23

23

23

23

Fixed Costs
Salaries
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Fixed Selling Expenses

12

14

15

17

17

Depreciation (SLM)

Utilities (Fixed)

Admin. Overheads

14

14

14

14

14

Loan Repayment

29

29

29

29

29

Interest On L.T. Loan

22

18

14

Total Fixed Costs

110

108

106

103

98

257

293

330

367

367

13.58

15.52

17.46

19.40

19.40

Total Variable Costs

270

309

347

386

386

Contribution

211

241

271

302

302

Breakeven In %

52%

45%

39%

34%

33%

Average BEP

41%

Variable Cost
Raw Materials
Interest On Working Capital Loan

The IRR for the project is 23.2%, Average ROI is 86% and the average DSCR is 3.27
(Rs. In Lakhs)
Particulars

Year of Operation
1
481

2
550

3
619

4
688

5
688

Profit Before Tax

104.88

137.10

170.05

202.99

207.50

Profit After Tax

70.27

91.86

113.93

136.01

139.03

LT Interest

21.83

18.05

13.54

9.02

4.51

Depreciation

9.36

9.36

9.36

9.36

9.36

LT Loan Repayment

29.11

29.11

29.11

29.11

29.11

Return on Investment (%)

62%

75%

88%

101%

101%

Average ROI

86%

Revenue

Debt-Service Coverage Ratio


- Debt Service

50.94

47.16

42.65

38.13

33.62

- Coverage

101.47

119.27

136.83

154.39

152.90

1.99

2.53

3.21

4.05

4.55

DSCR
Average DSCR

3.27

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10

Toys

10.1

Introduction

Mott MacDonald
NEDFi

Plastics due to possibility of wide range of shapes, designs and colours and suitability to mass
production are finding ever increasing acceptance as the conventional raw materials for toys. This is
also the fastest growing market because of increasing urbanization and an awareness about the quality
of toys. All the present manufacturers of branded toys use different plastics as the major raw material
for their toys.
Newer designs continue being introduced in the market to attract consumer attention. However, the
basic themes for toys are almost the same over the years e.g. dolls, cars, aeroplanes, trains, animals,
robots etc. For the present profile, we have considered a project to manufacture quality plastic
moulded toys based on all the above themes.
10.2

Market Potential

The household goods, toys sector is highly fragmented in the north east, characterized by the presence
of about 9-10 small scale manufacturers. The total consumption of PP by these industries ranges from
100-150 TPA, of which the consumption in Assam is about 15-20 TPM. The total PE consumption
(mainly HDPE consumption) is about 50 TPM, of which Assam accounts for about 10%. The overall
growth of industries in this sector has been 10-15%.
10.3

Plant Capacity

The production basis for a typical unit would be as under:


Working hours/day: 8 (1 shift)
Working days in a year: 300
Annual Production capacity: 500 TPA of LLDPE Toys
The unit has been assumed to operate at 75%, 80% and 90% of its installed capacity in the first,
second and third year and at 100% capacity from the fourth year onwards of its operation.
10.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

The manufacturing process involves preparation of charge, injection moulding of parts or entire toy,
finishing and assembling, printing and packaging. IM grade LLDPE is mixed with other additives like
stabilizers and colourants. This compounded charge is fed in controlled quantity through a feed-hopper
to the extruder cylinder, where by means of band heaters and shearing action of continuously rotating
screw it is converted into an easily flowing melt. Through a well designed nozzle, runner and gate
arrangement the melt is transferred into the required mould, mounted on the fixed platen of injection
moulded unit. The moving platen closes the mould at specified locking tonnage and the part or entire
toy gets moulded under required pressure.
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The article remains in the mould till it is cooled and is then ejected by means of ejector pins or plates.
The moulded part is then sent to the finishing section where extra materials are removed and sent for
recycling. If printing is to be done, the finished part is sent to printing unit. Otherwise it is directly sent
to assembly and packaging unit where assembling and final packaging is done before despatching the
toy to stores.
The machinery required is as under:
1. Injection Moulding Machine
2. Printing Machine
3. Moulds
4. Utility equipments
Machinery Suppliers:
1.

Anu Engineering Works


253/260, 1st Main, Vinayaka Nagar,
Kamakshipalya Industrial Area
Mumbai- 560079

2. Ace Automation,
228/1, M. G. R. Street,
Sivanandapuram, Saravanampatti
Coimbatore - 641 035
3. G.S Azad Industry
A-31, Nariana Industrial Area Phase I
New Delhi - 110 028
10.5

Raw Material & Utilities Requirement

The raw material required is LLDPE. At 100% capacity utilisation 510 MT of LLDPE is required. For
packaging, 51 MT of LLDPE is required.
Raw
Material Total requirement per annum Cost (Rs./MT)
Requirement
(MT)

Total
Lakhs)

Cost(Rs.

LLDPE( 2% wastage)

510

72098

368

LLDPE for packaging

51

72098

37

Total Raw Material Cost

404

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The main utilities are power and water. Around 386 KL of water and 20 KW of power is required per
annum.
10.6

Land & Built-up Area Requirement

The total land required is 2000 sq. m. and the built-up area is 800 sq. m
10.7

Manpower Requirement

Staff

Nos

Plant Manager

Production Manager

Accountant

Supervisors

Skilled Workers

10

Unskilled Workers

10

Security

Total Manpower Required

28

A margin of 25% has been considered for other benefits for the staff.
10.8

Project Cost/ Fixed Capital Requirement & Means of Finance:

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The total project cost is Rs. 152.82 Lakhs as per the table below:
S.No.

Cost Head

Building

Machinery

Miscellaneous Fixed Assets

Preliminary and Pre-Operative Expenses

Margin Money for Working Capital

Contingency Expenses

Land Development

Cost (in Rs. Lakhs)


64.00
19.23
19.88
2.00
36.63
7.09
4.00
152.82

Total
The means of finance considering Debt-Equity ratio of 2:1 will be:
Means of Finance
Equity
Debt

Rs in lakhs
50.94
101.89
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Total
10.9

152.82
Working Capital Requirement

The total working capital requirement is as under:


Years of Operation

Particulars
Net WC

1
109.88

2
117.21

3
131.86

4
146.51

5
146.51

Available Bank Finance

82.41

87.91

98.89

109.88

109.88

Margin Money

27.47

29.30

32.96

36.63

36.63

10.10

Operating Expenses

The Annual Operating Expenses for the first year (75 % capacity utilisation) are given below:
S.No

Particulars

Expense(Rs in lakhs)
0.1

Utilities

Wages & Salaries

Interest on term loan

Interest on Bank Finance for Working Capital

Raw Material

Depreciation

Maintenance Charge

14.34
15.28
12.36
303.35
5.18
0.46
351.08

Total
10.11

Profitability Estimates

S. NO. PARTICULARS

YEAR
Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

Installed Capacity

500

500

500

500

500

Capacity Utilization

75%

80%

90%

100%

100%

Estimated Production

375

400

450

500

500

Gross Sales Revenue

413

440

495

550

550

303

324

364

404

404

Utilities

Administrative Overheads

11

11

11

11

11

Salaries

14

14

14

14

14

Sales Expenses

10

11

12

14

14

Production/Sales

Expenses
Raw Material Consumption

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20

20

20

20

20

Maintenance Charges

0.46

0.46

0.46

0.46

0.46

Total

360

381

423

465

465

Gross Profit

53

59

72

85

85

Interest On Term Loan

15

13

Interest On Working Capital

12

13

15

16

16

Sub Total

28

26

24

23

20

Depreciation

5.2

5.2

5.2

5.2

5.2

Profit Before Tax

20

28

43

58

61

Provision For Tax

14

19

20

Profit After Tax

13

19

29

39

41

Loan Repayment

Financial Expenses

10.12

Financial Indicators

The average break-even point for the project is 68%.


Particulars

(Rs In Lakh)
Yr -1
413

Yr-2
440

Yr -3
495

Yr -4
550

Yr-5
550

Salaries

18

18

18

18

18

Fixed Selling Expenses

10

11

12

14

14

Depreciation (SLM)

Utilities (Fixed)

Admin. Overheads

11

11

11

11

11

Loan Repayment

20

20

20

20

20

Interest On L.T. Loan

15

13

Total Fixed Costs

80

78

76

75

71

303

324

364

404

404

12.36

13.19

14.83

16.48

16.48

Total Variable Costs

316

337

379

421

421

Contribution

97

103

116

129

129

Breakeven In %

83%

76%

66%

58%

55%

Average BEP

68%

Sales Realisation
Fixed Costs

Variable Cost
Raw Materials
Interest On Working Capital Loan

The IRR for the project is 22%, Average ROI is 37% and the average DSCR is 1.49.
(Rs. In Lakhs)
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Particulars

Mott MacDonald
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Year of Operation
1
413

2
440

3
495

4
550

5
550

Profit Before Tax

19.69

28.11

42.80

57.48

60.64

Profit After Tax

13.19

18.83

28.67

38.51

40.63

LT Interest

15.28

12.63

9.48

6.32

3.16

Depreciation

5.18

5.18

5.18

5.18

5.18

LT Loan Repayment

20.38

20.38

20.38

20.38

20.38

Return on Investment (%)

26%

30%

38%

45%

45%

Average ROI

37%

Revenue

Debt-Service Coverage Ratio


- Debt Service

35.66

33.01

29.85

26.69

23.54

- Coverage

33.68

36.67

43.35

50.04

48.99

DSCR

0.94

1.11

1.45

1.87

2.08

Average DSCR

1.49

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11

Woven Sacks

11.1

Introduction

Mott MacDonald
NEDFi

Synthetic Woven Sacks made from HDPE or PP are one of the bulk packaging materials. These sacks
are presently being used for packaging of bulk commodities like cement, fertilizers and some other
applications like sugar, salt, chemicals, wheat flour, starch, poultry products, bulk drugs etc. Some of
the newer applications of woven sacks are Geo-synthetic products, postal/mail bags, tea packaging etc.
High density polyethylene or HDPE woven sacks have become a versatile commodity in the
packaging industry. Introduced for the first time in India during the year 1969 it has over the years
replaced the conventional jute bags to a large extent. HDPE sacks have an edge over the conventional
jute sacks in the sense that the former are light in weight, strong and attractive. These sacks are
immune to the effect of corrosion, decay, moisture, atmosphere, rats, rodents, moths and insects.
Being superior in quality and economic as compared to the traditional jute material, these modern
sacks have gradually captured a large market for packing fertilizers, chemicals, food stuffs, animal
foods, oil cakes etc. Sacks made of HDPE are laminated with LDPE inside it. This gives protection
against moisture, air and the material packed cannot penetrate out of the sack.
11.2

Market Potential

Woven Sacks industry constitutes PP & HDPE polymers and is primarily used for packaging of
industrial goods such as cement, fertilizer, flour, chemicals, sugar as well as agricultural produce. The
total estimated installed capacity of woven sacks segment in North-Eastern Region is in the range of
900 MTPM dominated by PP. The woven sacks industry is the single largest PP consuming sector in
the NER. At present there are no units manufacturing laminated HDPE woven sacks in Assam or in
any part of the N.E. Region. As a result the full requirement of laminated HDPE woven sacks is
supplied by manufacturers from outside the state and region.
The current demand for woven sacks in North Eastern region is estimated to be in the range of 600650 MTPM of which only 60-70% of the requirement is fulfilled by local industries. Cement,
Fertilizer and Flour Mills are major woven sacks consuming sectors in North-Eastern Region. The
only fertilizer complex (urea based) of NER is located in Assam with installed capacity of 0.5
MMTPA, and has reported a production growth of 12% in the past five years. Apart from urea
complex, there are 9 bio-fertilizer units in the region with a total installed capacity of 1115 MTPA.
The consumption of HDPE for a standard packaging size of 50 kg fertilizer ranges between 110-120
gm. Based on this, the annual HDPE consumption for the fertilizer industry is estimated to be about
800 TPA (nearly 70 TPM). Almost entire quantity of the HDPE sacks requirement is met by suppliers
outside the NER.
11.3

Plant Capacity

The production basis for a typical unit would be as under:

Working hours/day: 8 (1 shift)


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Working days in a year: 300

Annual Production capacity: 600 TPA laminated HDPE woven sacks and 400 TPA of PP
woven sacks.

The unit has been assumed to operate at 75%, 80% and 90% of its installed capacity in the
first, second and third year and onwards of its operation.

11.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

The process of manufacture of laminated HDPE woven sacks involves four major operations which
maintain continuity from the raw material or HDPE granules stage to the finished product stage. These
operations or processes are as follows:
1. Production of mono-axially oriented tapes in the extruder and auxiliary equipment
2. Processing of the tapes thus produced in textile equipment and machinery to obtain the woven
material or fabric.
3. Extrusion coating/laminating the out coming woven material with low density polyethylene in
the extrusion coating/laminating plant.
4. Cutting and stitching the laminated woven material into the required sizes and finally printing
the name, trade mark etc. of the agency whose product is to be packed on the sack to obtain
the final or finished product.
Major machinery required for manufacturing woven sacks is as under:
Extrusion Tape Lines for Raffia Tape Manufacture
Circular Weaving Machines
Laminating Machines
Cutting Machine
Stitching Machines
Printing Machines
Under this project, the plant would be producing the output till the laminating stage. Cutting, stitching
and printing can be outsourced (on job work basis) since the production capacity is not that high and
hence it is advisable to go in till the laminating stage in the initial phase. For future expansion,
machines for cutting, stitching and printing can be added.
Plant and Machinery Suppliers
The following table gives the names and addresses of suppliers along with the machinery type suitable
for the process and product.

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Sl No
1

Name
Lohia Starlinger Ltd

DGP Windsor India Ltd

J.P.Industries

Brimco Plastic Machinery (P)


Ltd

11.5

Raw Material & Utilities Requirement

Mott MacDonald
NEDFi

Communication Address
D-3/A,
Panki
Industrial
Estate,
Kanpur - 208 022, INDIA
5403, Phase IV, G. I. D. C. Industrial Area, Vatva,
Ahmedabad 380 44, Gujarat
1701,
G.I.D.C.
Industrial
Estate
Ankleshwar
393
002,
Dist. Bharuch, Gujarat, India.
Brimco House, 55 Govt. Indl. Estate,Charkop, Kandivli
(W), Mumbai - 400067 ,Maharashtra, India

The major raw material required for the project is as follows:


Raffia grade high density polyethylene (HDPE)
Raffia grade polypropylene (PP)
Lamination grade low density Polyethylene (LDPE)
The production capacity of HDPE & PP has been taken at 60:40. The raw material required would be
around 630 MT of HDPE and 420 MT of PP at 100% capacity utilisation.
11.6

Land & Built-up Area Requirement

The total land required is 8000 sq.m. and the built-up area is 3200 sq.m.
11.7

Manpower Requirement & Project Implementation Schedule

Staff

Nos
1

Production Manager
Accountant

Supervisors

Skilled Workers

10

Unskilled Workers

15

Security

Total Manpower Required

35

A margin of 25% has been considered for other benefits for the staff.
11.8

Project Cost/ Fixed Capital Requirement & Means of Finance:

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The total Project Cost is Rs. 675.44 Lakhs as per the table below:
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S.No
1
2
3
4
5
6
7
Total

Cost Head
Building
Machinery
Miscellaneous Fixed Assets
Preliminary and Pre-Operative Expenses
Margin Money for Working Capital
Contingency Expenses
Land Development

Mott MacDonald
NEDFi

Cost (in Rs. Lakhs)


256.00
279.13
20.13
2.00
70.78
31.40
16.00
675.44

The means of finance considering Debt-Equity ratio of 2:1 will be:

Means of Finance

Rs in lakhs
225.12

Equity

450.31
675.44

Debt
Total
11.9

Working Capital Requirement

The Total Working Capital Requirement is as under:


Particulars

Years of Operation

Net WC

1
283.14

2
302.01

3
339.77

4
377.52

5
377.52

Available Bank Finance

212.35

226.51

254.82

283.14

283.14

Margin Money

70.78

75.50

84.94

94.38

94.38

11.10

Operating Expenses

The Annual Operating expenses for the first year (75% capacity utilization) are given below:
Sl No

Particulars

Expense(Rs in lakhs)
1.06

Utilities

Wages & Salaries

Interest on term loan

Interest on Bank Finance for Working Capital

Raw Material

Depreciation

Maintenance Charges

Job Work Charges

15.84
67.55
31.85
570.50
30.80
1.84
15.00
734.44

Total
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11.11

Mott MacDonald
NEDFi

Profitability Estimates
(Rs. In Lakhs)

S. NO. PARTICULARS

YEAR
Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

Installed Capacity (HDPE

600

600

600

600

600

Installed

400

400

400

400

400

Capacity Utilization

75%

80%

90%

100%

100%

Estimated

Production

450

480

540

600

600

Estimated Production (PP

300

320

360

400

400

Gross Sales Revenue

1140

1216

1368

1520

1520

571

609

685

761

761

Utilities

Administrative Overheads

30

30

30

30

30

Salaries

20

20

20

20

20

Sales Expenses

29

30

34

38

38

Loan Repayment

90

90

90

90

90

Maintenance Charges

Job Work Charges

15

16

18

20

20

Total

757

798

880

962

962

Gross Profit

383

418

488

558

558

Interest On Term Loan

68

56

42

28

14

Interest

32

34

38

42

42

99

90

80

70

56

Depreciation

30.8

30.8

30.8

30.8

30.8

Profit Before Tax

253

297

377

457

471

Provision For Tax

83

98

124

151

155

Profit After Tax

169

199

253

306

316

Production/Sales
Capacity

(PP

Expenses
Raw Material Consumption

Financial Expenses
On

Working

Sub Total

11.12

Financial Indicators

The average break-even point for the project is 40%.


Particulars
Sales Realisation

(Rs In Lakh)
Yr -1
1140
68

Yr-2
1216

Yr -3
1368

Yr -4
1520

Yr-5
1520

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Fixed Costs
Salaries

20

20

20

20

20

Fixed Selling Expenses

29

30

34

38

38

Depreciation (SLM)

31

31

31

31

31

Utilities (Fixed)

Admin. Overheads

30

30

30

30

30

Loan Repayment

90

90

90

90

90

Interest On L.T. Loan

68

56

42

28

14

Total Fixed Costs

268

258

248

238

224

571

609

685

761

761

31.85

33.98

38.22

42.47

42.47

Total Variable Costs

602

643

723

803

803

Contribution

538

573

645

717

717

Breakeven In %

50%

45%

38%

33%

31%

Average BEP

40%

Variable Cost
Raw Materials
Interest On Working Capital Loan

The IRR for the project is 18.9%, Average ROI is 66% and the average DSCR is 2.54.
(Rs. In Lakhs)
Particulars

Year of Operation
1
1140

2
1216

Profit Before Tax

252.64

Profit After Tax

1368

1520

1520

297.29

377.14

456.98

470.94

169.27

199.18

252.68

306.18

315.53

LT Interest

67.55

55.84

41.88

27.92

13.96

Depreciation

30.80

30.80

30.80

30.80

30.80

LT Loan Repayment

90.06

90.06

90.06

90.06

90.06

Return on Investment (%)

52%

57%

67%

76%

76%

Average ROI

66%

Revenue

Debt-Service Coverage Ratio


- Debt Service

157.61

145.90

131.94

117.98

104.02

- Coverage

267.61

285.82

325.36

364.90

360.29

DSCR

1.70

1.96

2.47

3.09

3.46

Average DSCR

2.54

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12

HDPE Mug, Bucket, Containers and PP Comb

12.1

Introduction

Mott MacDonald
NEDFi

Thermo-plastic materials like High Density Polythene (HDPE) can be blow moulded into containers
of different sizes and shapes. Some of the common items that are produced include buckets, mugs and
jerry cans. Their light weight, flexibility, corrosion and chemical resistance have made these plastic
products popular for storage and handling of water, petrol, diesel etc.
Combs are an item of daily necessity. In earlier days, combs were made out of ivory, horns of cows
and buffaloes, which have now become costly affair. In recent years, plastic combs are being used,
increasingly it is becoming convenient to handle and economic. Plastic combs are produced using
Polypropylene by injection moulding machines.
12.2

Market Potential

Plastic comb, mug, bucket and containers are considered as necessity items for every household. As
per 2001 census the population of North Eastern region is 3.90 Crores. Considering that five persons
constitute a household the total household in the region is 78, 00,000 and also considering that every
year there is a replacement demand to change these items by at least 30% of total number of
households, the requirement of these items on this basis becomes 23,40,000 numbers. This may be in
addition to the new demand for these items by at least 15% of total number of household every year
which stands at 11,70,000. Therefore, every year at least 35, 10,000 such items are required by the
households in the North Eastern Region.
To meet the above demand there exist around 10 numbers of related units in the region in Guwahati,
Dibrugarh and Dimapur. The production of these units is limited and bulk of the requirement is being
met from outside sources, the leading brands being Brite and Prince. Again plastic combs are of
normal size and pocket size combs. The leading brands the market are Lily, Brite, Joy and Dill.
Therefore there is a scope for additional units to produce plastic mug, bucket, containers and combs.
12.3

Plant Capacity

The production basis for a small unit would be as under:


Working hours/day: 8 (1 shift)
Working days in a year: 300
Annual Production capacity:
o

7, 00,000 nos of products of which 3, 60,000 are Mug, 1, 40,000 Bucket and 2, 00,000
are Containers.

6, 00,000 Nos of Plastic comb comprising normal size comb.

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NEDFi

The unit has been assumed to operate at 70%, 80% and 90% of its installed capacity in the first,
second and third year and at 100% capacity from the fourth year onwards of its operation.
12.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

(i)

Manufacturing Process

Mug, bucket and containers are manufactured on a semi-automatic extrusion blow moulding machine.
The main process steps involved are as follows:
Plastic material in the form of granules is subjected to heat and pressure in an extruder.
Semi-molten plastic in extruder passed through the nozzle known as Parison. Adjustments have to
be made in the machine to vary the wall thickness of the parison.
Suitable parison is then inserted in a female mould and air is blown into parison to force the molten
plastic against the sides of the mould.
The material is then cooled before removal from the mould.
The article is then trimmed to remove flashes.
The main process steps for plastic combs are as follows:
Polypropylene is fed into the hopper of the injection moulding machine, which essentially has an
injection unit and a multicavity mould system.
The mould is held between the two platens which are kept closed by the locking pressure.
The material which gets plasticized in the barrel is injected under higher pressure into the mould
which results in a moulded article i.e. comb.
The combs are then finished by removing the injection feed etc.
The second stage processing operations i.e. buffing, polishing and printing are carried out on the
combs.
The combs are then kept inside plastic water proof paper cover and packed.
(ii)

Plant and Machinery

The following are the plant and machinery required for the project.
The major equipment required by the unit for producing mug, bucket and container are as follows:
Semi automatic extrusion blow moulding machine consisting of:
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 500 mm screw extruder with 10 HP motor, variable speed drive and electrical
control cabinet.
 Cross head dies (single, double and triple cores) and spanner.
 Mould closing and opening unit with hydraulic system
 Compressor.
Water pump
Moulds, dies tools etc
The main equipment required for producing plastic combs are as follows:
Semi automatic hydraulic injection moulding machine complete with all accessories
Scrap grinder
Buffing, polishing and hot stamping machine
Moulds
Small hand-tools, greasing and cooling equipment
Testing instruments such as micrometer, balance etc
The equipment has been selected keeping in view the capacity and other process considerations.
(iii)

Plant and Machinery Suppliers

The following are the list of the plant and machinery suppliers.
1

Sl No

Name
M/s R.H. Windsor (India) Ltd.

Communication Address
E-6 UZ Road, Thane Industrial Estate,
Thane 400 604

M/s British Plastic & Engineering Works

M/s Oswal Engineering Corpn.

M/s Kwality Engineering works

89.2, Block A, Naraina Industrial Area,


Phase-1, New Delhi 110 028
142/48 S.V. Road,
Ghaswala Industrial Estate,
Jogeswari (West), Mumbai 400 102
48A, Muktaram Babu Street,
Kolkata 700 007

12.5

Raw Material & Utilities Requirement

The main raw materials required are PP and HDPE. The annual requirement at 100% capacity
utilisation for PP and HDPE is estimated to be 74 tonnes per annum (considering wastage also).

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The utilities required are power and water. Around 75 KW of Power and 3300 KLPA of water are
required.

Material
HDPE

Items
Mug
Bucket
Container

Numbers
manufactured
360000
140000
200000

Approx Wt (gms)

600000

10

Sub total
Combs
PP
Total with 2 % wastage
12.6

40
300
50

Total Weight in
Tonne/year
14
42
10
66
6
74

Land & Built-up Area Requirement

The total estimated land requirement is 1000 sq metre while the built-up area is 700 sq.mtrs.
12.7

Manpower Requirement

The total manpower requirement is 15 nos out of which administrative is 4 and factory staff is 11.
Details of the manpower are given below:
Personnel
Works Manager
Accountant-cum-Store Keeper
Administrative Assistant
Clerk
Skilled Workers
Unskilled Workers
Peon/Watchman
Total
12.8

Nos
1
1
1
1
6
4
1
15

Project Cost/ Fixed Capital Requirement & Means of Finance:

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The total project cost is estimated at Rs 130.48 lakhs as follows.
Sl No
1
2
3
4
5
6

Project Cost and Means of Finance


Particulars
Site Development Cost
Building
Plant and Machinery
Miscellaneous Fixed Assets
Preliminary and Pre-Operative Expenses
Margin Money on Working Capital

Rs in Lakhs
2.00
56.00
47.46
7.25
2.44
9.13

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7
Total

Mott MacDonald
NEDFi

Contingencies

6.21
130.48

This project cost may be financed at a debt equity ratio of 3:1 as follows.

Means of Finance

Rs in lakhs
32.62
97.86
130.48

Equity
Debt
Total
12.9

Working Capital Requirement

The working capital requirement is estimated as follows.


No.
1
2
3

12.10

Particulars
Net Working Capital
Available Bank Finance
Margin Money

Years of Operation
2
3
4
41.73
46.95
52.17
31.30
35.21
39.13
10.43
11.74
13.04

1
36.52
27.39
9.13

5
52.17
39.13
13.04

Operating Expenses

The Annual Operating Expenses estimated at Rs 86.95 lakhs (70% capacity utilization) are given
below:
Sl No
Particulars
Rs in lakhs
1
Maintenance Charges
0.23
2
Raw materials
34.23
3
Utilities
5.37
4
Wages & Salaries
9.98
5
Administrative Overheads
4.20
6
Selling expenses
5.75
7
Packing expenses
4.03
8
Interest on term loan
14.68
9
Interest on Bank Finance for Working Capital
4.11
10
Depreciation
4.39
Total
86.95
12.11

Profitability Estimates
(Rs in Lakhs)

Sl No

Particulars

Production/Sales
Installed Capacity

Yr -1

Yr-2

Year
Yr -3

Yr -4

Yr-5

72

72

72

72

72

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Capacity Utilization
Estimated Production
Gross Sales Revenue

Mott MacDonald
NEDFi

70%
51
161

80%
58
184

90%
65
207

100%
72
230

100%
72
230

35
5
4
10
4
4
0
0.23
63
98

40
5
4
10
5
5
24
0.23
94
90

45
5
4
10
5
5
24
0.23
100
107

50
5
4
10
6
6
24
0.23
106
124

50
5
4
10
6
6
24
0.23
106
124

15
4
19
4.4
75
25
50

15
5
19
4.4
66
22
45

11
5
16
4.4
86
28
58

7
6
13
4.4
106
35
71

4
6
10
4.4
110
36
74

Expenses
Raw Material Consumption
Utilities
Administrative Overheads
Salaries
Sales Expenses
Packing Expenses
Loan Repayment
Lease Rentals
Total
Gross Profit
Financial Expenses
Interest On Term Loan
Interest On Working Capital
Sub Total
Depreciation
Profit Before Tax
Provision For Tax
Profit After Tax
12.12

Financial Indicators

The Average Break Even Point for the project is 41%.


Sales Realisation
Fixed Costs
Salaries
Fixed Selling Expenses
Depreciation (SLM)
Repairs & Maintenance
Utilities (Fixed)
Admin. Overheads Incl Insurance
Interest On L.T. Loan
Loan Repayment
Total Fixed Costs
Variable Cost
Raw Materials
Packing
Interest On Working Capital Loans
Total Variable Costs

Yr -1
161

Yr-2
184

Yr -3
207

Yr -4
230

Yr-5
230

10
4
4
2
5
4
15
45

10
5
4
2
5
4
15
24
70

10
5
4
2
5
4
11
24
67

10
6
4
2
5
4
7
24
63

10
6
4
2
5
4
4
24
60

35
4
4.11
43

40
5
4.70
50

45
5
5.28
56

50
6
5.87
62

50
6
5.87
62

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Contribution
Breakeven In %
Average Breakeven

118
38%
41%

134
52%

Mott MacDonald
NEDFi

151
44%

168
38%

168
36%

The IRR for the project is 19.7%, Average ROI is 79% and Average DSCR is 2.78.
Particulars
Revenue
Profit Before Tax
Profit After Tax
LT Interest
Depreciation
LT Loan Repayment
Return on Investment (%)
Average ROI
Debt-Service Coverage Ratio
- Debt Service
- Coverage
DSCR
Average DSCR

1
161
74.68
50.03
14.68
4.39
0.00
72%
79%

2
184
66.43
44.51
14.68
4.39
24.47
66%

14.68
69.11
4.71
2.78

39.14
63.58
1.62

Year of Operation
3
4
207
230
86.32
106.21
57.83
71.16
11.01
7.34
4.39
4.39
24.47
24.47
78%
90%

35.47
73.23
2.06

31.81
82.89
2.61

5
230
109.87
73.62
3.67
4.39
24.47
90%

28.14
81.68
2.90

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13

HDPE Small Bottles and Containers

13.1

Introduction

Mott MacDonald
NEDFi

Thermoplastic materials like High Density Polythene (HDPE) can be blow moulded into containers of
different sizes and shapes. Some of the common items that are produced include bottles and containers
of different size. Bottles and containers are more than half of all HDPE packaging products. Their
light weight, flexibility, corrosion and chemical resistance have made these plastic products popular
for storage and handling of water, petrol, diesel etc.
HDPE Bottles are used for detergents, shampoos, motor oil, milk and other liquid products and drugs
and cosmetic products. Milk bottles are the single biggest HDPE packaging material. Most milk and
water bottles use a natural-colored HDPE resin. Bottles used for detergents, shampoos and other
products often have colorants added to the resin. Injection-moulded HDPE containers are used for
products such as margarine and yogurt. Bottles have 90 percent of the HDPE rigid package market;
while containers have the remainder. HDPE resin also can be used to make bottle and container caps,
and flexible packaging such as sacks and trash bags. HDPE bottles and containers have been
displacing heavier metal, glass and paper packaging since 1970s.
13.2

Market Potential

Since the early seventies high-density polyethylene (HDPE) has been the polymer of choice for the
production of bottles of up to 5 litres capacity. These bottles are cornering the market for packaging
liquids such as detergents, cosmetics, lubricants and dairy products, a market whose scope has opened
up a multitude of potential applications for HDPE. In this market that was far from mature, growth
could be realized in virtually every segment. There was little competition except from PVC.
At present, cartons, pouches and bottles made of HDPE, polypropylene, PET (recycled bottles) and
polycarbonate all compete for space on retailers' shelves. Glass bottles have lost market share and are
now holding their own in just a few traditional segments.
The features which make HDPE the first choice are the following:
Highly cost-effective material
Excellent fitness for use
Wide-ranging design potential and processing flexibility,
Excellent polymer supported by a good depth of market experience at all points in the value chain,
Meets the environmental requirements imposed by modern-day society.
Thus, industry has recognized HDPE as the plastic container of choice to ensure purity of its contents.
Plastic milk containers and the non-clear variety of water jugs are made of High Density Polyethylene.
Opaque vitamin and medicinal products are contained in HDPE containers. Laundry detergent bottles
and fuel tanks in automotive vehicles are also made of HDPE.
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HDPE containers have become very popular among health conscious individuals who want to store
their items in the best food grade plastic material possible. Refillable water bottles, food storage
containers and body product bottles are some of the most requested items in our inventory. HDPE
plastic may be identified by its milky translucent or opaque white color.
13.3

Plant Capacity

The production basis for a small unit would be as under:


Working hours/day: 16 (2 shift)
Working days in a year: 300
Annual Production capacity: 18 lakh HDPE bottles/containers of sizes of 500 ml and 1000 ml.
The unit has been assumed to operate at 70%, 80% and 90% of its installed capacity in the first,
second and third year and at 100% capacity from the fourth year onwards of its operation.
13.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

(i)

Manufacturing Process

HDPE Bottles and containers are manufactured in an automatic/ semi-automatic extrusion blow
moulding machine. The main process steps involved are as follows:
Plastic material in the form of granules is subjected to heat and pressure in an extruder.
Semi-molten plastic in extruder passed through the nozzle known as Parison. Adjustments have to
be made in the machine to vary the wall thickness of the parison.
Suitable parison is then inserted in a female mould and air is blown into parison to force the molten
plastic against the sides of the mould.
The material is then cooled before removal from the mould.
The article is then checked for holes etc using compressed plant air.
(ii)

Plant and Machinery

The major equipments required by the unit for HDPE bottles are as follows:
Automatic / Semi automatic extrusion blow moulding machine consisting of:
o Extruder
o Cross head dies (single, double and triple cores) and spanner.
o Mould closing and opening unit with hydraulic system
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o Compressor.
Water pump
The equipment has been selected keeping in view the capacity and other process considerations.
(iii)

Plant and Machinery Suppliers

The following is the list of the plant and machinery suppliers.


1

Sl No

Name
Suresh Engineering Works

Communication Address
13,14-B, Kalyan Vishranti Grah.South
Tukoganj, Indore-452 001 (M.P)

M/s R.H. Windsor (India) Ltd.

E-6 UZ Road, Thane Industrial Estate,


Thane 400 604

M/s British Plastic & Engineering Works

M/s Oswal Engineering Corpn.

M/s Kwality Engineering works

89.2, Block A, Naraina Industrial Area,


Phase-1, New Delhi 110 028
142/48 S.V. Road,
Ghaswala Industrial Estate,
Jogeswari (West), Mumbai 400 102
48A, Muktaram Babu Street,
Kolkata 700 007

13.5

Raw Material & Utilities Requirement

The main raw material required is HDPE. The annual requirement at 100% capacity utilisation for
HDPE is estimated to be 128 tonnes per annum (considering wastage also).
The utilities required are power and water. Around 30 KW of Power and 450 KLPA of water are
required.
13.6

Land & Built-up Area Requirement

The total land area is estimated to be 700 sq metres while the built- up area is 500 sq.mtrs.
13.7

Manpower Requirement

The total manpower requirement is 15 nos out of which administrative is 4 and factory staff is 11.
Personnel

Nos
1
1
1
1
5
3
2
1
15

Works Manager
Accountant-cum-Store Keeper
Administrative Assistant
Clerk
Skilled Workers
Semi Skilled Workers
Unskilled Workers
Peon/Watchman
Total
79

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13.8

Mott MacDonald
NEDFi

Project Cost/ Fixed Capital Requirement & Means of Finance:

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The total project cost is estimated at Rs 68.80 lakhs as follows.
Sl No
1
2
3
4
5
6
7
Total

Particulars
Site Development Cost
Building
Plant and Machinery
Miscellaneous Fixed Assets
Preliminary and Pre-Operative Expenses
Margin Money on Working Capital
Contingencies

Rs in Lakhs
1.40
40.00
7.25
7.38
1.28
8.21
3.28
68.80

The project cost may be financed under a debt equity ratio of 3: 1 as follows:
Means of Finance
Equity
Debt
Total
13.9

Rs in lakhs
17.20
51.60
68.80

Working Capital Requirement

The working capital requirement is estimated as follows.


No.
1
2
3
13.10

Particulars
Net Working Capital
Available Bank Finance
Margin Money

Years of Operation
2
3
4
37.53
42.22
46.92
28.15
31.67
35.19
9.38
10.56
11.73

1
32.84
24.63
8.21

5
46.92
35.19
11.73

Operating Expenses

The annual operating expenses estimated at Rs 95.57 lakhs (80% capacity utilization) as given below:
Sl No
Particulars
Rs in lakhs
1
Annual Land Charges
0.16
2
Raw materials
60.23
3
Utilities
1.71
4
Wages & Salaries
9.98
5
Administrative Overheads
3.10
6
Selling expenses
3.36
7
Packing expenses
3.36
8
Interest on term loan
7.74
9
Interest on Bank Finance for Working Capital
3.69
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Total
13.11

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NEDFi

Depreciation

2.24
95.57

Profitability Estimates
(Rs. in Lakhs)

Sl No

Particulars

Production/Sales
Installed Capacity in lakh nos
Capacity Utilization
Estimated Production
Gross Sales Revenue
Expenses
Raw Material Consumption
Utilities
Administrative Overheads
Salaries
Sales Expenses
Packing Expenses
Loan Repayment
Lease Rentals
Total
Gross Profit
Financial Expenses
Interest On Term Loan
Interest On Working Capital
Sub Total
Depreciation
Profit Before Tax
Provision For Tax
Profit After Tax
13.12

Yr -1

Yr-2

Year
Yr -3

18
70%
13

18
80%
14

18
90%
16

18
100%
18

18
100%
18

134

154

173

192

192

60
2
3
10
3
3
0
0.16
82
53

69
2
3
10
4
4
13
0.16
104
49

77
2
3
10
4
4
13
0.16
114
59

86
2
3
10
5
5
13
0.16
123
69

86
2
3
10
5
5
13
0.16
123
69

8
4
11
2
39
13
26

8
4
12
2
35
12
23

6
5
11
2
46
15
31

4
5
9
2
57
19
38

2
5
7
2
59
20
39

Yr -4

Yr-5

Financial Indicators

The Average Break Even Point for the project is 45%.


Particulars
Sales Realisation
Fixed Costs
Salaries
Fixed Selling Expenses
Depreciation (SLM)
Repairs & Maintenance

Yr -1
134

Yr-2
154

Yr -3
173

Yr -4
192

Yr-5
192

10
3
2
1

10
4
2
1

10
4
2
1

10
5
2
1

10
5
2
1

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Utilities (Fixed)
Admin. Overheads Incl Insurance
Interest On L.T. Loan
Loan Repayment
Total Fixed Costs
Variable Cost
Raw Materials
Packing
Interest On Working Capital Loans
Total Variable Costs
Contribution
Breakeven In %
Average Breakeven In %

2
3
8
29
60
3
3.69
67
67
43%
45%

Mott MacDonald
NEDFi

2
3
8
13
43

2
3
6
13
41

2
3
4
13
40

2
3
2
13
38

69
4
4.22
77
77
55%

77
4
4.75
87
86
48%

86
5
5.28
96
96
41%

86
5
5.28
96
96
39%

The IRR for the project is 20.1%, Average ROI is 80% and average DSCR is 3.14.
Particulars
Revenue
Profit Before Tax
Profit After Tax
LT Interest
Depreciation
Return on Investment (%)
Average ROI
Debt-Service Coverage Ratio
- Debt Service
- Coverage
DSCR
Average DSCR

134
38.83
25.82
7.74
2.24
71%
80%

154
35.04
23.30
7.74
2.24
65%

7.74
35.80
4.63
3.14

20.64
33.28
1.61

Year of Operation
3
4
173
192
46.08
57.12
30.64
37.99
5.81
3.87
2.24
2.24
79%
92%

18.71
38.69
2.07

16.77
44.10
2.63

5
192
59.06
66.25
1.94
2.24
92%

14.84
70.43
4.75

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14

HDPE Mosquito Nets

14.1

Introduction

Mott MacDonald
NEDFi

Mosquito net is an essential item of the bedding used by people to protect themselves from mosquito
bites during sleep. Though other protective items like mosquito repellent coils and mats, ointments are
available yet people prefer mosquito nets as there are no side effects as present in the chemically
prepared item. Hence, the demand for mosquito nets is always in the increase. With the introduction of
plastic nets, the preference for cotton nets are decreasing as plastic nets have more durability, easier
and lighter to wash with better air circulation.
14.2

Market Potential

Mosquito net is an essential item for human use. Its demand is not seasonal but exists throughout the
year. Apart from domestic consumption, there exists demand in hotels, hospital and defence sector,
who are bulk purchasers of the item through rate contracts.
14.3

Plant Capacity

The proposed plant shall produce HDPE mosquito nets in the weight range of 660-1060 Gms with an
installed capacity of 144 MT at 100% capacity utilisation.
14.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

(i)

Manufacturing Process

The raw material, HDPE is extruded. This fibre is wound onto bobbins and is weaved. The woven net
is cut and stitched and is checked for quality and packed in bails.
(ii)

Plant and Machinery

The plant and machineries required for manufacturing HDPE Mosquito Net is as follows:

Extruder

Hanking Machine

Winding Machine

Warping Machine

Knitting Looms

Heat Processing Machine

Bale Press

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(iii)

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NEDFi

Plant and Machinery Suppliers

The following table gives the name and address of suppliers along with the machinery type suitable for
the process and product.
Sl No
1

Name
Neptune Plastics Industries

GCL India (P) Limited

14.5

Communication Address
18
R
N
Mukherjee
Road,
7th
Floor
Kolkata-700001, West Bengal, India
A-419/420, 10th Main, 2nd Stage, Peenya Industrial Estate,
Bangalore - 560058, Karnataka, India

Raw Material & Utilities Requirement

The major raw material required for the project is high density polyethylene (HDPE). The raw
material required would be around 144 MT at 100% capacity utilisation.
The utilities required are power and water. Around 75 KW of Power and 450 KLPA of water are
required.
14.6

Land & Built-up Area Requirement

The total land area is 1500 sq metres and the built up area is 1000 sq mt.
14.7

Manpower Requirement

Total manpower required would be 21 Nos of which administrative is 4 and factory staff is 17.
Personnel
Nos
Works Manager
1
Accountant-cum-Store Keeper
1
Administrative Assistant
1
Clerk
1
Skilled Workers
8
Semi Skilled Workers
4
Unskilled Workers
4
Peon/Watchman
1
Total
21
14.8

Project Cost/ Fixed Capital Requirement & Means of Finance

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The project cost is estimated at Rs 202.08 lakhs as follows.
Sl No
1
2
3
4

Particulars
Site Development Cost
Building
Plant and Machinery
Miscellaneous Fixed Assets

Rs in Lakhs
3.00
80.00
83.05
7.80
84

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5
6
7

Preliminary and Pre-Operative Expenses


Margin Money on Working Capital
Contingencies
Total

2.00
16.61
9.62
202.08

Of this, the project cost may be financed at a debt equity ratio of 3:1 as follows
Means of Finance
Equity
Debt
Total
14.9

Mott MacDonald
NEDFi

Rs in lakhs
50.52
151.56
202.08

Working Capital Requirement

The working capital requirement is as given below:


No.
1
2
3
14.10

Particulars
Net Working Capital
Available Bank Finance
Margin Money

Years of Operation
1
2
3
66.44
74.74
83.05
49.83
56.06
62.29
16.61
18.69
20.76

( Rs in Lakhs)
4
5
83.05
83.05
62.29
62.29
20.76
20.76

Operating Expenses

The annual operating expenses estimated at Rs 151.60 lakhs (80% capacity utilization) is given below:
Sl No
Particulars
Rs in lakhs
1
Annual Land Charges
0.35
2
Raw materials
77.71
3
Utilities
4.31
4
Wages & Salaries
12.98
5
Overheads
5.36
6
Selling expenses
7.20
7
Packing expenses
7.20
8
Interest on term loan
22.73
9
Interest on Bank Finance for Working Capital
7.47
10
Depreciation
6.63
Total
151.60
14.11

Profitability Estimates
(Rs. in Lakhs)

Sl No

Particulars

Production/Sales
Installed Capacity
Capacity Utilization

Yr -1

Yr-2

Year
Yr -3

144
80%

144
90%

144
100%

Yr -4

Yr-5

144
100%

144
100%

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Estimated Production
Gross Sales Revenue

Mott MacDonald
NEDFi

115

130

144

144

144

288

324

360

360

360

78
4
5
13
7
7
0
0.35

87
4

97
4

97
4

97
4

5
13
8
8
38
0.35

5
13
9
9
38
0.35

5
13
9
9
38
0.35

5
13
9
9
38
0.35

115

165

176

176

176

173

159

184

184

184

23
7
30
7
136
46
90

23
8
31
7
122
41
81

17
9
26
7
151
51
100

11
9
21
7
157
52
104

6
9
15
7
162
54
108

Expenses
Raw Material Consumption
Utilities
Administrative Overheads
Salaries
Sales Expenses
Packing Expenses
Loan Repayment
Lease Rentals
Total
Gross Profit
Financial Expenses
Interest On Term Loan
Interest On Working Capital
Sub Total
Depreciation
Profit Before Tax
Provision For Tax
Profit After Tax
14.12

Financial Indicators

The Average Break Even Point for the project is 38%.


Particulars
Sales Realisation
Fixed Costs
Salaries
Fixed Selling Expenses
Depreciation (SLM)
Repairs & Maintenance
Utilities (Fixed)
Admin. Overheads Incl
Interest On L.T. Loan
Loan Repayment
Total Fixed Costs
Variable Cost
Raw Materials
Packing
Interest On Working Capital Loans
Total Variable Costs
Contribution

Yr -1
288

Yr-2
324

Yr -3
360

Yr -4
360

Yr-5
360

13
7
7
3
4
5
23
-

13
8
7
3
4
5
23
38

13
9
7
3
4
5
17
38

13
9
7
3
4
5
11
38

13
9
7
3
4
5
6
38

62

101

96

91

85

78
7
7.47
92
196

87
8
8.41
104
220

97
9
9.34
115
245

97
9
9.34
115
245

97
9
9.34
115
245

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Breakeven In %
Average Breakeven In %

32%
38%

46%

Mott MacDonald
NEDFi

39%

37%

35%

The IRR for the project is 24.7%, Average ROI is 83% and average DSCR is 2.92.
Particulars
1
Revenue
Profit Before Tax
Profit After Tax
LT Interest
Depreciation
LT Loan Repayment
Return on Investment (%)
Average ROI
Debt-Service Coverage Ratio
- Debt Service
- Coverage
DSCR
Average DSCR

288
136.05
90.48
22.73
6.63
0.00
82%
83%
22.73
119.84
5.27
2.92

Year of Operation
2
3
4
324
360
360
121.72
150.95
156.63
80.94
100.38
104.16
22.73
17.05
11.37
6.63
6.63
6.63
37.89
37.89
37.89
75%
86%
86%

360
162.32
107.94
5.68
6.63
37.89
86%

60.62
110.31
1.82

43.57
120.26
2.76

54.94
124.06
2.26

49.26
122.16
2.48

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15

LLDPE Bio-Degradable Sheets/Carry Bags

15.1

Introduction

Mott MacDonald
NEDFi

Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) belong to
polyethylene group of thermo-plastics. LDPE is generally the softest and least crystalline of all the
polyethylene. LDPE has a unique combination of properties namely toughness, high impact strength,
low-brittleness temperature, flexibility, processibility, film transparency, chemical resistance and
having a density of 0.91 0.94. LDPE applications are mostly film based. The most common
application areas are in food packaging, milk pouches, industrial products, textiles, frozen foods,
agriculture and horticulture section etc.
LLDPE has all the advantages of LDPE together with the added benefit of low energy output which
leads to a saving of over 20% in the manufacturing cost. The use of LLDPE has been predominantly in
blends with LDPE as far as film extrusion is concerned. LLDPE and LDPE blended film are used for
milk packaging, nursery bags, heavy duty sacks and general purpose bags.
15.2

Market Potential

The unit is proposed to manufacture LLDPE carry bags and LDPE sheets. The biggest advantage of
using LLDPE is the possibility of down gauging of the film upto 30 percent or more with an
improvement in the mechanical properties such as tensile strength, tear strength etc. The common
sizes of plastic carry bags are 1 x 1 , 1 x 2, 1 x 3, 1 x and x .Different sizes
LLDPE carry bags are required by grocery shops, stationary shops, textile shops, restaurant, bakery,
pharmaceuticals shops, automobile spare parts shops etc.
Conversion of LDPE is mostly in the form of a film with balanced orientation for better toughness.
LDPE sheets generally come in rolls of size 100m x 2m and weight around 12 kg 14 kg. LDPE
sheets are mostly required by tea gardens to be used as aprons by labour for plucking of tea leaves, by
vegetables seller and for commercial as well as domestic use for protection from water/rainfall and for
tea packaging along with jute bags etc. LDPE sheets also have a good potential outlet in the filed of
agriculture and horticulture for several packaging and non packaging applications.
Mention may be made here that products manufactured from granules are of A Grade quality with
fine finishing fetching high price, the products manufactured from mixing of granules and scraps are
of Grade B quality with medium finishing fetching medium price and the products manufacturing
from scraps are of Grade C quality with average finish fetching low price. In view of recent ban on
Grade B and Grade C quality, finished products only A Grade quality finished products is
considered for the purpose.
15.3

Plant Capacity

The production basis for the unit would be as under:


Working hours/day : 8 (1 shift)
Working days in a year : 300
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NEDFi

Annual Production capacity : 360 MT (carry bags 240 MT, Sheets 120 MT)
The unit has been assumed to operate at 70%, 80% and 90% of its installed capacity in the first,
second and third year and 100% capacity from the fourth year onwards of its operation.
15.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

(i)

Manufacturing Process

LDPE/LLDPE films are manufactured by extrusion process. Plastic extrusion is basically defined as
converting plastic powder or granules into a continuous uniform melt and forcing this melt through a
die which yields a desired shape. Any thermo-plastic product required in length of uniform crosssection is extruded. The basic processing steps involved are
Mixing of colours with granules.
Feeding of colour mixed granules into the hopper.
Heating of these mixed raw materials in an extruder.
Passing of molten raw materials through dies to get desired shape.
Cooling and winding of film.
Making of desired size Sheets/Bags and sorting.
Packing and despatch.
In India, an indigenous technology for LDPE, LLDPE products manufacturing is provided by
organizations like Central Institute of Plastic Engineering & Technology (CIPET).
(ii)

Details of Plant and Machinery

The major equipment required by the unit is shown below. The equipment has been selected keeping
in view the capacity and other process considerations.
Plant and equipment for extrusion of LDPE/LLDPE film which consists of the main assembles
Low base extruder, spiral type die set, air cooling ring, blower for cooling, take up tower, surface
winder and electrical control panel
Punches suitable for dies of 50mm and 80mm for processing LLDPE with air ring insert
Snap winding mechanism and cutting system (1 No).
Bottom Seal and both end seal bag making machine (for carry bags).
(iii)

Plant and Machinery Suppliers

The following is the list of plant and machinery suppliers.


Sl No

Name

Communication Address
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1
2
3
4

15.5

Mott MacDonald
NEDFi

M/s R.H. Windsor (India) Ltd.

E-6 UZ Road, Thane Industrial Estate,


Thane 400 604
M/s British Plastic & Engineering 89.2, Block A,Naraina Industrial Area,
Works
Phase-1, New Delhi 110 028
M/s Oswal Engineering Corpn.
142/48 S.V. Road, Ghaswala Industrial Estate,
Jogeswari (West), Mumbai 400 102
M/s Kwality Engineering works
48A, Muktaram Babu Street,
Kolkata 700 007

Raw Material & Utilities Requirement

The main raw materials required are LDPE/LLDPE granules and master batch (colour). The colour to
be mixed with the raw materials is at the rate of around 2%.
The requirement of LDPE/LLDPE granules and master batch are as follows:
LDPE/LLDPE granules : 360 MT
Master batch: 7.2 MT
The utilities required are power and water. Around 100 KW of Power and 3840 KLPA of water are
required.
15.6

Land & Built-up Area Requirement

The total land required is 700 sq m and the built up area is 500 sq.m.
15.7

Manpower Requirement & Project Implementation Schedule

The total manpower required is 22, out of which administrative staff is 5 and factory staff is 17.
Personnel

Nos
1
1
1
2
6
6
4
1
22

Works Manager
Accountant-cum-Store Keeper
Administrative Assistant
Clerk
Skilled Workers
Semi Skilled Workers
Unskilled Workers
Peon/Watchman
Total
15.8

Project Cost/ Fixed Capital Requirement & Means of Finance:

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The total project cost is estimated at Rs 122.39 lakhs as follows.
Sl No

Particulars

Rs in Lakhs
90

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1
2
3
4
5
6
7

Site Development Cost


Building
Plant and Machinery
Miscellaneous Fixed Assets
Preliminary and Pre-Operative Expenses
Margin Money on Working Capital
Contingencies
Total

Mott MacDonald
NEDFi

1.40
40.00
44.51
7.58
2.29
20.78
5.83
122.39

The project cost may be financed under a debt equity ratio of 3: 1 as follows:
Means of Finance
Rs in lakhs
Promoters contribution
30.60
Term Loan
91.79
Total
122.39
15.9

Working Capital Requirement

The working capital requirement is estimated as follows.


No.
1
2
3
15.10

Particulars
Net Working Capital
Available Bank Finance
Margin Money

1
83.12
62.34
20.78

Years of Operation
2
3
4
94.99
106.87
118.74
71.25
80.15
89.06
23.75
26.72
29.69

5
118.74
89.06
29.69

Operating Expenses

The annual operating expenses are estimated at Rs 250.53 lakhs (70% capacity utilization) is as given
below:

Sl No
1
2
3
4
5
6
7
8
9
10
Total

Particulars
Annual Land Charges
Raw materials
Utilities
Wages & Salaries
Overheads
Selling expenses
Packing expenses
Interest on term loan
Interest on Bank Finance for Working Capital
Depreciation

Rs in lakhs
0.16
182.30
6.88
12.68
2.81
8.19
8.19
13.77
9.35
6.21
250.53

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15.11

Mott MacDonald
NEDFi

Profitability Estimates
(Rs. in Lakhs)

Sl No Particulars
Production/Sales
Installed Capacity
Capacity Utilization
Estimated Production
Gross Sales Revenue
Expenses
Raw Material Consumption
Utilities
Administrative Overheads
Salaries
Sales Expenses
Packing Expenses
Loan Repayment
Lease Rentals
Total
Gross Profit
Financial Expenses
Interest On Term Loan
Interest On Working Capital
Sub Total
Depreciation
Profit Before Tax
Provision For Tax
Profit After Tax
15.12

Yr -1

Yr-2

Year
Yr -3

360
70%
252

360
80%
288

360
90%
324

360
100%
360

360
100%
360

328

374

421

468

468

187
7
3
13
8
8
0
0
226
102

214
7
3
13
9
9
23
0
278
97

240
7
3
13
11
11
23
0
307
114

267
7
3
13
12
12
23
0
336
132

267
7
3
13
12
12
23
0
336
132

14
9
23
6.2
73
24
49

14
11
24
6.2
66
22
44

10
12
22
6.2
86
28
58

7
13
20
6.2
106
35
71

3
13
17
6.2
109
36
73

Yr -4

Yr-5

Financial Indicators

The Average Break Even Point for the project is 44%.


Particulars
Sales Realisation
Fixed Costs
Salaries
Fixed Selling Expenses
Depreciation (SLM)
Repairs & Maintenance
Utilities (Fixed)
Admin. Overheads incl Insurance
Interest On L.T. Loan

Yr -1
328

Yr-2
374

Yr -3
421

Yr -4
468

Yr-5
468

13
8
6
1
7
3
14

13
9
6
1
7
3
14

13
11
6
1
7
3
10

13
12
6
1
7
3
7

13
12
6
1
7
3
3

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Loan Repayment
Total Fixed Costs
Variable Cost
Raw Materials
Packing
Interest On Working Capital Loans
Total Variable Costs
Contribution
Breakeven In %
Average Breakeven In %

Mott MacDonald
NEDFi

52

23
76

23
74

23
72

23
68

187
8
9.35
204
123
42%
44%

214
9
10.69
234
141
54%

240
11
12.02
263
158
47%

267
12
13.36
292
176
41%

267
12
13.36
292
176
39%

The IRR for the project is 25.1%, Average ROI is 85% and average DSCR is 2.98.
Particulars
Revenue
Profit Before Tax
Profit After Tax
LT Interest
Depreciation
LT Loan Repayment
Return on Investment (%)
Average ROI
Debt-Service Coverage Ratio
- Debt Service
- Coverage
DSCR
Average DSCR

1
328
72.53
48.60
13.77
6.21
0.00
76%
85%

2
374
66.02
44.23
13.77
6.21
22.95
70%

13.77
68.57
4.98
2.98

36.72
64.21
1.75

Year of Operation
3
4
421
468
85.89
105.77
57.55
70.86
10.33
6.88
6.21
6.21
22.95
22.95
84%
97%

33.27
74.08
2.23

29.83
83.96
2.81

5
468
109.21
73.17
3.44
6.21
22.95
97%

26.39
82.82
3.14

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16

PP Blow Moulded Plastic Products

16.1

Introduction

Mott MacDonald
NEDFi

Blow moulded products made from Polypropylene offer excellent combination of good strength,
contact clarity, creep resistance, excellent sealing characteristics, environmental stress and crack
resistance. These are being used in sectors like Cosmetics, Pharmaceuticals, laboratory ware and liquid
packaging.
16.2

Market Potential

Keeping in view the pattern of usage of jug, mug, bucket and jerry can in urban and rural areas, there
is a substantial demand of about 60 to 65 lakhs numbers for assorted products. On the other hand the
water storage tank for domestic purpose, it is estimated that at present about 60,000 MT of plastic tank
equivalent to 10, 80,000 pieces of 1000 litres capacity are required annually. There are 8-10 blow
moulding units in the north eastern region. The production of these units is limited and bulk of the
requirement is being met from outside sources, the leading brands being Brite and Prince.
16.3

Plant Capacity

The installed capacity for production of Jugs, Mugs, and Buckets would be 81 MT. This would mean
that approximately 6,55,000 nos of the above 3 articles is expected to be produced. The plant is
expected to run single shift of 8 hours for a total 300 days per annum.
16.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

(i)

Manufacturing Process

The main product is proposed to be manufactured on a semi automatic extrusion blow moulding
machine. The main process steps involved are:
Plastic material in the form of granules is subjected to heat and pressure in an extruder.
Semi-molten plastic in extruder passed through the nozzle known as parison. Adjustments have to
be made in the machine to vary the wall thickness of the parison.
Suitable parison is then inserted in a female mould and air is blown into parison to force the molten
plastic against the sides of the mould.
The material is then cooled before removal from the mould.
The article is then trimmed to remove flashes.
(ii)

Plant and Machinery

The main equipment required is


Semi-Automatic extrusion blow moulding machine consisting
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o screw extruder motor, variable speed drive and electrical control cabinet
o Cross head dies (single, double and triple cores) and spacer
o Mould closing and opening unit with hydraulic System
Compressor with motor
Water Pump with
Moulds, dies, tools etc
(iii)

Plant and Machinery Suppliers

The following is a list of plant and machinery manufacturers for the blow moulding products.
Sl No
1

2
3

16.5

Name
M/s Ahura Industrial Engineers

Communication Address
18, Sidhpura Industrial Estate
Tarun Compound,SV Road Goregaon,
Andheri (East),Mumbai 400 062
M/s Boolani Engineering Corporation
402, Prabhadevi Industrial Estate
Savarkar Road, Mumbai 400 018
M/s
Brimco
Plastic
Machinery Plot 55, Govt. Kandivli Industrial
Corporation
Estate,Kandivli (West),
Mumbai 400 067
M/s Universal Machinery Services
Tarun Compound, SV Road, Goregaon,
Andheri (East)
Mumbai 400 062
Raw Material & Utilities Requirement

The major raw material required is PP. About 83 MT of PP is required per year. At a cost of Rs 64 per
kg inclusive of state tax, customs duty, transportation charges etc.

Raw Material Requirement


Nos
Jugs
150,000
Mugs
300000
Buckets
205,000
Total Raw Material Reqd with wastage of 2%

Total wt in gms
50
40
300

Annual Tonnage in MT
7.5
12
61.5
82.62

The utilities required are power and water. Around 75 KW of Power and 4500 KLPA of water are
required.
16.6

Land & Built-up Area Requirement

The total land area required is 300 square metres and the build up area is 200 square metres.

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16.7

Mott MacDonald
NEDFi

Manpower Requirement

The total manpower requirement is 14 nos out of which administrative is 4 and factory staff is 10.
Staff
Works Manager
Accountant-cum-Store Keeper
Administrative Assistant
Clerk
Skilled Workers
Semi skilled workers
Unskilled Workers
Peon/Watchman
Total
16.8

Nos
1
1
1
1
5
2
2
1
14

Project Cost/ Fixed Capital Requirement & Means of Finance

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The total project cost is estimated at Rs 64.47 lakhs as follows.
Sl No
1
2
3
4
5
6
7

Particulars

Rs in Lakhs
0.60
16.00
29.26
7.35
1.20
6.99
3.07
64.47

Site Development Cost


Building
Plant and Machinery
Miscellaneous Fixed Assets
Preliminary and Pre-Operative Expenses
Margin Money on Working Capital
Contingencies
Total

The total project cost at a debt equity ratio of 3:1 as follows


Means of Finance
Promoters contribution
Term Loan
Total
16.9

Rs in lakhs
16.12
48.35
64.47

Working Capital Requirement

The working capital requirement is estimated as follows.


No.

Particulars

Years of Operation
2
3
4

1
1
2
3

Net WC

Available Bank Finance


Margin Money

27.94
20.96
6.99

31.36
23.52
7.84

34.84
26.13
8.71

34.84
26.13
8.71

5
34.84
26.13
8.71

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16.10

Mott MacDonald
NEDFi

Operating Expenses

The annual operating expenses estimated at Rs 85.90 Lakhs (80% capacity utilization) as given below:
Sl No
Particulars
Rs in lakhs
1
Annual Land Charges
0.07
2
Raw materials
50.20
3
Utilities
5.97
4
Wages & Salaries
9.53
5
Overheads
1.70
6
Selling expenses
2.90
7
Packing expenses
2.90
8
Interest on term loan
7.25
9
Interest on Bank Finance for Working Capital
3.14
10
Depreciation
2.25
Total
85.90
16.11

Profitability Estimates
(Rs in Lakhs)

Sl No

Particulars

Production/Sales
Installed Capacity
Capacity Utilization
Estimated Production
Gross Sales Revenue
Expenses
Raw Material Consumption
Utilities
Administrative Overheads
Salaries
Sales Expenses
Packing Expenses
Loan Repayment
Lease Rentals
Total
Gross Profit
Financial Expenses
Interest On Term Loan
Interest On Working Capital
Sub Total
Depreciation
Profit Before Tax
Provision For Tax

Yr -1

Yr-2

Year
Yr -3

81
80%
66

81
90%
73

81
100%
81

81
100%
81

81
100%
81

116

130

145

145

145

47
6
2
8
3
3
0
0.07
68
47

52
6
2
8
3
3
12
0.07
74
56

58
6
2
8
4
4
12
0.07
80
64

58
6
2
8
4
4
12
0.07
80
64

58
6
2
8
4
4
12
0.07
80
64

7
3
10
2.2
35
11

7
4
11
2.2
43
14

5
4
9
2.2
53
17

4
4
8
2.2
54
18

2
4
6
2.2
56
19

Yr -4

Yr-5

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Profit After Tax


16.12

23

Mott MacDonald
NEDFi

29

35

36

38

Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

116

130

145

145

145

8
3
2
1
6
2
7
29

8
3
2
1
6
2
7
12
41

8
4
2
1
6
2
7
12
41

8
4
2
1
6
2
7
12
41

8
4
2
1
6
2
7
12
41

47
3
3.14
53
62
46%
52%

52
3
3.53
59
71
58%

58
4
3.92
66
79
52%

58
4
3.92
66
79
52%

58
4
3.92
66
79
52%

Financial Indicators

The Average Break Even Point for the project is 52%.


Particulars
Sales Realisation
Fixed Costs
Salaries
Fixed Selling Expenses
Depreciation (SLM)
Repairs & Maintenance
Utilities (Fixed)
Admin. Overheads Incl Insurance
Interest On L.T. Loan
Loan Repayment
Total Fixed Costs
Variable Cost
Raw Materials
Packing
Interest On Working Capital Loans
Total Variable Costs
Contribution
Breakeven In %
Average Breakeven In %

The IRR for the project is 26.3%, Average ROI is 86% and average DSCR is 2.93.
1

Year of Operation
3

116
34.77
23.30
7.25
0.00
2.25
0.00
0.00
69%
86%

130
43.27
28.99
7.25
0.00
2.25
12.09
0.00
82%

145
52.64
35.27
5.44
0.00
2.25
12.09
0.00
94%

145
54.46
36.49
3.63
0.00
2.25
12.09
0.00
94%

145
56.27
37.70
1.81
0.00
2.25
12.09
0.00
94%

7.25
32.80
4.52

19.34
38.49
1.99

17.53
42.96
2.45

15.72
42.36
2.70

13.90
41.76
3.00

Particulars
Revenue
Profit Before Tax
Profit After Tax
LT Interest
Interest on Deposits
Depreciation
LT Loan Repayment
Deposit Repayment
Return on Investment (%)
Average ROI
Debt-Service Coverage Ratio
- Debt Service
- Coverage
DSCR

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Average DSCR

Mott MacDonald
NEDFi

2.93

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17

Moulded Luggage

17.1

Introduction

Mott MacDonald
NEDFi

Plastic luggages like Brief Cases, Suitcases etc. are manufactured from high-density polyethylene,
ABS plastics, polypropylene and glass reinforced plastic etc. Its main application is for string of items
while travelling. This type of luggage is tailor-made, sometimes, for different applications i.e. for
delicate use like ladies vanity cases, moderate use like ordinary travelling bags or rough use while on
tour. New designs and shapes are being constantly developed to facilitate easy handling while
travelling which offers increasing durability. Luggage bags are being developed using new and
tougher grades of plastic resins, sometimes reinforced with glass fibre and other fillers, to improve
certain specific properties as well as to reduce the cost.
17.2

Market Potential

There is a vast market available for luggage and considering the population of our country; there is
ample scope for growth of this industry. Tailor-made luggage is available to cater to the needs of
different income groups people and for a variety of applications. Use of plastic in luggage industry is
ever increasing and it will go on replacing other conventional materials such as wood, ply, metal,
leather etc. rapidly. There is a good scope for luggage items in the international market also.
17.3

Plant Capacity

The plant is slated to produce 66,000 nos of moulded luggage of 16, 18 and 20 Brief case.
17.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

(i)

Manufacturing Process

The required raw material is fed into the hopper of the injection-moulding machine and heated in the
cylinder. The required mould is kept in the locking unit. The plastic melt is stored in front of the screw
in a small adjustable chamber. The predetermined volume of plastic melt is injected into the closed
mould at a very high pressure by forward motion of screw. After 5 to 15 seconds, the solidification of
plastic fed melt being in the mould (which is constantly cooled by cold water circulation), the injected
material is kept under pressure for sometime to ensure adequate filling of the mould and to prevent
back-flow of material.
Further time is allowed to lapse for cooling and material is ejected from the mould when it becomes
rigid by air stream or by mechanical ejectors. After the two parts of the item are ready, metallic
fittings, locks, handles etc. are fixed as per requirement of the luggage.
(ii)

Plant and Machinery

Technology required for the project is simple and is normally being supplied by the machinery
suppliers.

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(iii)

Mott MacDonald
NEDFi

Plant and Machinery Suppliers

The following is the list of plant and machinery suppliers of the above equipments.

Sl No
1
2
3
4

17.5

Name
M/s. DGP Windsor India Ltd.

Communication Address
E-6, U2 Road,Wogle Industrial Estate,
Thane-400604
M/s. Sunanda Industrial Machinery, A 109, Standard House,83, Maharishi Karup
Division of Mafatlal Industries Ltd.
Road, Mumbai
M/s. Indian Hydraulic Inds. Pvt. Ltd
70, Shivaji Marg Indl. Area
New Delhi-15
M/s. Ferromatik Milacron India Ltd.
Plot No. 92, Phase-1 G.I.D.C Vatva,
Ahmedabad-382445.
Raw Material & Utilities Requirement

The major raw material required for the project would be HDPE of injection moulding grade, metallic
fixtures / locks and Rexene as per the no of pieces of luggage produced. The raw material required
would be around 45 MT at 100% capacity utilisation.
The unit has been assumed to operate at 70%, 80% and 90% of its installed capacity in the first,
second and third year and at 100% capacity from the fourth year onwards of its operation.
The utilities required are power and water. Around 90 KW of Power and 6000 KLPA of water are
required.
17.6

Land & Built-up Area Requirement

The total land area is 500 sq metres and the built up area is 250 sq mt.
17.7

Manpower Requirement

Total manpower required would be 55 Nos as given below.

Personnel

Nos
3
3
2
2
20
15
8
2
55

Works Manager
Accountant-cum-Store Keeper
Administrative Assistant
Clerk
Skilled Workers
Semi Skilled Workers
Unskilled Workers
Peon/Watchman
Total

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17.8

Mott MacDonald
NEDFi

Project Cost/ Fixed Capital Requirement & Means of Finance

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The total project cost of Rs 111.22 Lakhs is as follows.
Sl No
1
2
3
4
5
6
7

Fixed Capital

Rs in Lakhs
1.00
20.00
63.27
7.94
2.08
11.64
5.30
111.22

Site Development Cost


Building
Plant and Machinery
Miscellaneous Fixed Assets
Preliminary and Pre-Operative Expenses
Margin Money on Working Capital
Contingencies
Total

The project cost may be financed with a debt: equity ratio of 3: 1 as follows.
Means of Finance
Equity
Debt
Total
17.9

Rs in lakhs
27.81
83.42
111.22

Working Capital Requirement

The working capital requirement is given below.


Sl No

Particulars
1

1
2
3
17.10

Net Working Capital


Available Bank Finance
Margin Money

46.56
34.92
11.64

Years of Operation
2
3
4
53.21
39.91
13.30

59.86
44.90
14.97

66.51
49.88
16.63

5
66.51
49.88
16.63

Operating Expenses

The annual operating expenses estimated at Rs 112.84 lakhs (70% capacity utilization) is given below:
Sl No
Particulars
Rs in lakhs
1
Annual Land Charges
0.115
2
Raw materials
44.92
3
Utilities
7.46
4
Wages & Salaries
23.88
5
Overheads
4.24
6
Selling expenses
4.92
7
Packing expenses
4.92
8
Interest on term loan
12.51
9
Interest on Bank Finance for Working Capital
5.24
10
Depreciation
4.63
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Total
17.11
Sl No

Profitability Estimates
Particulars

Production/Sales
Installed Capacity in lakh nos
Capacity Utilization
Estimated Production in lakh nos
Gross Sales Revenue
Expenses
Raw Material Consumption
Utilities
Administrative Overheads
Salaries
Sales Expenses
Packing Expenses
Loan Repayment
Lease Rentals
Total
Gross Profit
Financial Expenses
Interest On Term Loan
Interest On Working Capital
Sub Total
Depreciation
Profit Before Tax
Provision For Tax
Profit After Tax
17.12

112.84

Yr -1

Yr-2

Year
Yr -3

0.66
70%
0.46

0.66
80%
0.53

0.66
90%
0.59

0.66
100%
0.66

0.66
100%
0.66

197

225

253

281

281

68
7
4
24
5
5
0
0
114
83

78
7
4
24
6
6
21
0
146
79

87
7
4
24
6
6
21
0
157
96

97
7
4
24
7
7
21
0
168
113

97
7
4
24
7
7
21
0
168
113

13
5
18
5
61
20
41

13
6
18
5
56
19
37

9
7
16
5
76
25
50

6
7
14
5
95
32
63

3
7
11
5
98
33
65

Yr -4

Yr-5

Financial Indicators

The Average Break Even Point for the project is 50%.


Particulars
Sales Realisation
Fixed Costs
Salaries
Fixed Selling Expenses
Depreciation (SLM)
Repairs & Maintenance
Utilities (Fixed)
Admin. Overheads Incl
Interest On L.T. Loan

Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

197

225

253

281

281

24
5
5
2
7
4
13

24
6
5
2
7
4
13

24
6
5
2
7
4
9

24
7
5
2
7
4
6

24
7
5
2
7
4
3

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Loan Repayment
Total Fixed Costs
Variable Cost
Raw Materials
Packing
Interest On Working Capital Loans
Total Variable Costs
Contribution
Breakeven In %
Average Breakeven In %

Mott MacDonald
NEDFi

59

21
81

21
78

21
76

21
73

68
5
5.24
78
119
50%
50%

78
6
5.99
89
136
60%

87
6
6.73
101
153
51%

97
7
7.48
112
170
45%

97
7
7.48
112
170
43%

The IRR for the project is 21% , Average ROI is 82% and average DSCR is 2.83.
Particulars
Revenue
Profit Before Tax
Profit After Tax
LT Interest
Interest on Deposits
Depreciation
LT Loan Repayment
Deposit Repayment
Return on Investment (%)
Average ROI
Debt-Service Coverage Ratio
- Debt Service
- Coverage
DSCR
Average DSCR

1
197
60.94
40.52
12.51
0.00
4.63
0.00
0.00
70%
82%
12.51
57.66
4.61
2.83

Year of Operation
2
3
4
225
253
281
56.34
75.72
95.10
37.47
50.35
63.24
12.51
9.38
6.26
0.00
0.00
0.00
4.63
4.63
4.63
20.85
20.85
20.85
0.00
0.00
0.00
66%
81%
95%

5
281
98.23
65.32
3.13
0.00
4.63
20.85
0.00
95%

33.37
54.60
1.64

23.98
73.08
3.05

30.24
64.37
2.13

27.11
74.13
2.73

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18

Synthetic Wood

18.1

Introduction

Mott MacDonald
NEDFi

Plastic Lumber is a new plastic material having similar characteristics to wood. It is being promoted as
an alternate material for wood in furniture, building construction, marine construction and also in
chemical industries. This material has been well received in developed countries because of the
growing awareness about the need to maintain ecological balance and depleting forest resources.
18.2

Market Potential

Plastic Lumber could be used for numerous end use applications. Chiefly, it is used as an alternative to
timber. In general, its applications could be classified into the following categories of manufacturing
convenience furniture like office, restaurant furniture etc. It could also be used for making table tops,
partitions, cupboards, doors, windows etc.
The properties of plastic lumber which make it unique are the following:

Denser than wood

Virtually maintenance free

Long lasting (50 years plus, depending on the application)

Stain resistant

Graffiti-proof

Waterproof

UV resistant

Aesthetically pleasing (most plastic lumber has a wood-grained finish)

Impervious to insects

Not affected by exposure to most substances

Plastic lumber also:

Requires no painting or sealing (plastic lumber is available in almost any color and some
wood-composite plastic lumber can be painted as if it were wood)

Provides a good shock-absorbing surface for pedestrian traffic, such as runners and hikers

18.3

Plant Capacity

The typical size of the project for manufacture of plastic lumber could have an installed capacity of
144 MT per annum. This would mean that approx 4-20 kgs of plastic lumber could be manufactured at
100% capacity utilisation.
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18.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

(i)

Manufacturing Process

Mott MacDonald
NEDFi

Recycled plastic lumber has been in manufactured since the early 1980s. Plastic lumber is most
commonly manufactured from post-consumer high density polyethylene (HDPE), but linear low
density polyethylene (LLDPE) and low density polyethylene (LDPE) are also used.
These plastic feed stocks are derived from such raw materials as post-consumer milk jugs, soda
bottles, grocery bags, plastic wrap, bubble rap, detergent bottles, and water bottles, and other used
plastic commodities.
The recovered plastic is cleaned, shredded, and ground using plastic shredders and Granulators. The
material is then run through plastic extruders and mixed with foaming agents, UV stabilizers, and
color pigments to form plastic wood.
(ii)

Plant and Machinery

Two main methods are used to manufacture plastic lumber. These are Flow Moulding and Plastic
Extrusion. Both methods incorporate plastic extruders in the process but differ in the forming
technique.
The specific forming process, either flow moulding or extrusion is dictated by the size and shape of
the "Recycled Plastic Lumber" to be manufactured.
If the board is a large piece with a length of no more than ten feet, then one can consider flow
moulding. Flow moulding is the process of extruding melted plastic directly from the plastic extruder
into a mould of the shape required. However shapes those are to long or too thin will create excessive
pressure during the filling of the plastic lumber mould to be used successfully.
A long board of recycled plastic lumber should be manufactured by using "In Line Plastic Extrusion."
This is a process where the recycled plastic is continually extruded through a die into a forming tank
and then is cut to length.
(iii)

Plant and Machinery Suppliers

The following is the list of plant and machinery suppliers of the above equipments.
Sl No
1

Name
Multitech Engineers

Communication Address
Nr.ESIS Hospital,Opp Shri Guru Nanak
Gurudwara, Ulhasnagar No.2, Thane, 421002,
Maharashtra, India
52, Bindal Industrial Estate, Sakinaka, Andheri
(East), Mumbai 72, India

Europack Machines (India) Pvt. Ltd.

18.5

Raw Material & Utilities Requirement

The major raw material required for the project would be recycled HDPE bottles. In addition, master
batches are added to add colour. The raw material including HDPE bottles and master batches would
be around 150 MT at 100% capacity utilisation.

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The unit has been assumed to operate at 80% and 90% of its installed capacity in the first and second
year and at 100% capacity from the third year and onwards of its operation.
The utilities required are power and water. Around 55 KW of Power and 900 KLPA of water are
required.
18.6

Land & Built-up Area Requirement

The total land area is 750 sq metres and the built up area is 500 sq mt.
18.7

Manpower Requirement

Total manpower required would be 16 Nos of which administrative is 4 and factory staff is 12.
Additional benefits at the rate of 25% have been considered.
Personnel

Nos

Works Manager
Accountant-cum-Store Keeper
Administrative Assistant
Clerk
Skilled Workers
Semi Skilled Workers
Unskilled Workers
Peon/Watchman
Total
18.8

1
1
1
1
6
3
2
1
16

Project Cost/ Fixed Capital Requirement & Means of Finance

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The total project cost is estimated at Rs 84.47 lakhs as follows.
Sl No
1
2
3
4
5
6
7

Particulars
Site Development Cost
Building
Plant and Machinery
Miscellaneous Fixed Assets
Preliminary and Pre-Operative Expenses
Margin Money on Working Capital
Contingencies
Total

Rs in Lakhs
1.50
40.00
23.33
7.61
1.58
6.43
4.02
84.47

This project cost may be financed at a debt equity ratio of 3:1 as follows.
Means of Finance

Rs in lakhs

Promoters contribution
Term Loan

21.12
63.35
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Total

18.9

84.47

Working Capital Requirement

The working capital requirement is given below.


Sl No

Particulars

Years of Operation
2
3
4

1
1
2
3

Net Working Capital


Available Bank Finance
Margin Money

18.10

25.70
19.28
6.43

28.92
21.69
7.23

32.13
24.10
8.03

32.13
24.10
8.03

32.13
24.10
8.03

Operating Expenses

The annual operating expenses estimated at Rs 58.92 lakhs (80% capacity utilization) is given below:
Sl No
Particulars
Rs in lakhs
1
Annual Land Charges
0.17
2
Raw materials
19.74
3
Utilities
5.43
4
Wages & Salaries
8.46
5
Administrative Overheads
4.08
6
Selling expenses
2.88
7
Packing expenses
2.88
8
Interest on term loan
9.50
9
Interest on Bank Finance for Working Capital
2.89
10
Depreciation
2.89
Total
58.92
18.11
Sl No

Profitability Estimates
Yr -1

Yr-2

Year
Yr -3

144
80%
115

144
90%
130

144
100%
144

144
100%
144

144
100%
144

115

130

144

144

144

20
5
4
11
3
3
0

22
5
4
11
3
3
16

25
5
4
11
4
4
16

25
5
4
11
4
4
16

25
5
4
11
4
4
16

Particulars

Production/Sales
Installed Capacity
Capacity Utilization
Estimated Production
Gross Sales Revenue
Expenses
Raw Material Consumption
Utilities
Administrative Overheads
Salaries
Sales Expenses
Packing Expenses
Loan Repayment

Yr -4

Yr-5

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Lease Rentals
Total
Gross Profit
Financial Expenses
Interest On Term Loan
Interest On Working Capital
Sub Total
Depreciation
Profit Before Tax
Provision For Tax
Profit After Tax
18.12

Mott MacDonald
NEDFi

0.17
46
69

0.17
65
65

0.17
68
76

0.17
68
76

0.17
68
76

10
3
12
3
54
18
36

10
3
13
3
49
16
33

7
4
11
3
62
21
42

5
4
8
3
65
22
43

2
4
6
3
67
23
45

Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

115

130

144

144

144

11
3
3
1
5
4
10
37

11
3
3
1
5
4
16
10
53

11
4
3
1
5
4
16
7
51

11
4
3
1
5
4
16
5
48

11
4
3
1
5
4
16
2
46

20
3
2.89
25
90
41%
45%

22
3
3.25
29
101
52%

25
4
3.61
32
112
45%

25
4
3.61
32
112
43%

25
4
3.61
32
112
41%

Financial Indicators

The Average Break Even Point for the project is 45%.


Particulars
Sales Realisation
Fixed Costs
Salaries
Fixed Selling Expenses
Depreciation (SLM)
Repairs & Maintenance
Utilities (Fixed)
Admin. Overheads Incl Insurance
Loan Repayment
Interest On L.T. Loan
Total Fixed Costs
Variable Cost
Raw Materials
Packing
Interest On Working Capital Loans
Total Variable Costs
Contribution
Breakeven In %
Average BREAKEVEN IN %

The IRR for the project is 23.2%, Average ROI is 82% and average DSCR is 2.87.
Particulars
Revenue
Profit Before Tax
Profit After Tax
LT Interest
Interest on Deposits

Year of Operation
3

115
54.21
36.05
9.50
0.00

130
49.23
32.73
9.50
0.00

144
62.46
41.53
7.13
0.00

144
64.83
43.11
4.75
0.00

144
67.21
44.69
2.38
0.00

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Depreciation
LT Loan Repayment
Deposit Repayment
Return on Investment (%)
Average ROI
Debt-Service Coverage Ratio
- Debt Service
- Coverage
DSCR
Average DSCR

Mott MacDonald
NEDFi

2.89
0.00
0.00
79%
82%

2.89
15.84
0.00
73%

2.89
15.84
0.00
86%

2.89
15.84
0.00
86%

2.89
15.84
0.00
86%

9.50
48.44
5.10
2.87

25.34
45.12
1.78

22.96
51.55
2.24

20.59
50.75
2.46

18.21
49.96
2.74

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19

LLDPE Multi-layer Film

19.1

Introduction

Mott MacDonald
NEDFi

LLDPE multilayer films are widely used in packaging applications, where wrappings must not affect
contents and at the same time protect from damage and exposure to contaminants. In modern times,
Flexible Plastic Packaging (FPP) has become part & parcel of life of human being. Packaging is being
used in almost all context, may be it household or articles of daily use, to wide variety of materials.
Multi Layer co-extrusion blown films is made of suitable combination of PA, EVOH, LLDPE, LDPE,
EVA & need-based tie / binding materials. These films are very useful to store various foods,
agricultural products, medical apparatus, pesticides chemicals, daily use articles & war industry
articles. Thus PE multilayer films have very high demand potential in local as well as overseas market.
Multi Layer Films are used for
 General purpose packaging of food/non-food products
 Over wrap application as cling/stretch film
 Lamination of heat seal performance
19.2

Market Potential

LLDPE films also meet the criteria for approval for use in the food industry. They also have good
mechanical property, are recyclable and are economically viable. In addition, they may be heat shrunk,
that is they may be subjected to a heat source to shrink the film around a product for improved
packaging.
The multi layer films obtained by co-extrusion method are suitable for Snack foods, crisps,
confectionery, ice creams, biscuits, chocolates, bakery products, cheese, dried vegetables, dried fruits,
frozen vegetables, pies, crusty breads, bacon, coffee, cooked meat, fresh meat, dried soups, dried milk,
margarine, butter tubs, juices, non carbonate beverages, spices & cereals, fresh cut agricultural
produce, flowers etc.
There is good export potential for Multilayer films. Changing life style has created a market for wide
variety of goods including ready-to-eat food products, dairy products, and many household products.
This drives the growth of FPP industry in India and abroad alike.
19.3

Plant Capacity

The typical size of the project for manufacture of LLDPE multilayer film could have an installed
capacity of 144 MT per annum.

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19.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

(i)

Manufacturing Process

Mott MacDonald
NEDFi

Multi-layer Polyethylene (PE) film produce by the Blown Co-extrusion Process based on coextrusion concept. The manufacture of 3 layer composite film requires 3 extruders feeding resin
through hoppers into a single die. Each extruder processes specific material and is fed through a
common spiral, mandrel and the layers are brought together in the die. The film passes through a
common sizing calibrator into collapsible boards to the top nip roller which is water- cooled. The
platform on which the extruders are mounted may be rotated or the nip roller rotated to minimize
thickness variation, form the nip roll, the film made is passed through a corona treater to the turret
winder station.
(ii)

Plant and Machinery

The following are the plant and machinery required:


Extruders
Screen Changers (Manual & Hydraulic)
Micro Processor based Programmable Logic Control (PLC) system
Stationary Stream Lined Co-extrusion Die (SCD)
Thickness electronic Gauge Controller with I Flex software
Eliminator Air Ring insulated distributor manifold
Internal bubble cooling system
Bubble stabilizing cage
Oscillating Haul-off with Teflon coated aluminium rolls & collapsible frame
Water Annealing Tank SS
Linear Lay-on Turret winders with GAP features
Material Handling system for RM & Finished goods
Euro Chiller
Slitter & Rewinders
Softel Corona treater
Edge Guide system
Trim collector
Air Compressor for clean / chilled air in plant area
Chilling Plant
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NEDFi

Hopper Loading system


Cussetting attachment
Pellet wrapping machine
Positive air pressure creating system
Stand by Power DG set
Fork Lifts
(iii)

Plant and Machinery Suppliers

The following is the list of plant and machinery suppliers of the above equipments.
Sl No
1

Name
Sai Machine Tools Pvt. Ltd

Communication Address
Plot No. 23, Sector A, Sanwer Road Industrial
Area, Indore - 452 015 (M.P.) India
Wz-106/56, Rajouri Garden Extn. New Delhi110027 (India)
Kolsite House, Veera Desai Road, Andheri
(West), Mumbai 400 053, Maharashtra, India

S. S. Mechanical Engineers (P) Ltd.

Kolsite Maschine Fabrik Ltd. (KMF)

19.5

Raw Material & Utilities Requirement

The major raw material required for the project would be LLDPE. The raw material required would be
around 147 MT at 100% capacity utilisation.
The unit has been assumed to operate at 80% and 90% of its installed capacity in the first & second
year and at 100% of its capacity from the third year and onwards of its operation.
The utilities required are power and water. Around 20 KW of Power and 450 KLPA of water are
required.
19.6

Land & Built-up Area Requirement

The total land area is 700 sq metres and the built up area is 500 sq mt.
19.7

Manpower Requirement

Total manpower required would be 13 Nos of which administrative is 4 and factory staff is 9.

Personnel

Nos
1
1
1
1
4
2

Works Manager
Accountant-cum-Store Keeper
Administrative Assistant
Clerk
Skilled Workers
Semi Skilled Workers
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Unskilled Workers
Peon/Watchman
Total
19.8

2
1
13

Project Cost/ Fixed Capital Requirement & Means of Finance

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The total project cost is estimated at Rs 86.14 lakhs as follows.
Sl No
1
2
3
4
5
6
7
Total

Particulars

Rs in Lakhs
1.40
40.00
20.77
7.29
1.61
10.97
4.10
86.14

Site Development Cost


Building
Machinery
Miscellaneous Fixed Assets
Preliminary and Pre-Operative Expenses
Margin Money on Working Capital
Contingencies

This project cost may be financed at a debt equity ratio of 3:1 as follows.
Means of Finance
Promoters contribution
Term Loan
Total
19.9

Rs in lakhs
21.54
64.61
86.14

Working Capital Requirement

The working capital requirement is given below.


Sl No

Particulars
1

1
2
3
19.10

Net Working Capital


Available Bank Finance
Margin Money

43.89
32.92
10.97

Years of Operation
2
3
4
50.63
37.97
12.66

56.26
42.19
14.06

56.26
42.19
14.06

5
56.26
42.19
14.06

Operating Expenses

The annual operating expenses estimated at Rs 124.06 lakhs (80% capacity utilization) is given below:
Sl No
Particulars
Rs in lakhs
1
Annual Land Charges
0.15
2
Raw materials
83.34
3
Utilities
1.31
4
Wages & Salaries
8.93
5
Overheads
4.03
6
Selling expenses
4.46
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7
8
9
10

19.11
Sl No

Packing expenses
Interest on term loan
Interest on Bank Finance for Working Capital
Depreciation
Total

4.46
9.69
4.94
2.74
124.06

Profitability Estimates
Particulars

Production/Sales
Installed Capacity in nos
Capacity Utilization
Estimated Production in nos
Gross Sales Revenue
Expenses
Raw Material Consumption
Utilities
Administrative Overheads
Salaries
Sales Expenses
Packing Expenses
Loan Repayment
Lease Rentals
Total
Gross Profit
Financial Expenses
Interest On Term Loan
Interest On Working Capital
Sub Total
Depreciation
Profit Before Tax
Provision For Tax
Profit After Tax
19.12

Mott MacDonald
NEDFi

Yr -1

Yr-2

Year
Yr -3

144
80%
115

144
90%
130

144
100%
144

144
100%
144

144
100%
144

179

201

223

223

223

83
1
4
9
4
4
0
0.15
107
72

94
1
4
9
5
5
16
0.15
134
67

104
1
4
9
6
6
16
0.15
146
77

104
1
4
9
6
6
16
0.15
146
77

104
1
4
9
6
6
16
0.15
146
77

10
5
15
3
55
18
36

10
6
15
3
48
16
32

7
6
14
3
61
20
41

5
6
11
3
63
21
42

2
6
9
3
66
22
44

Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

179

201

223

223

223

9
4
3

9
5
3

9
6
3

9
6
3

9
6
3

Yr -4

Yr-5

Financial Indicators

The Average Break Even Point for the project is 43%.


Sales Realisation
Fixed Costs
Salaries
Fixed Selling Expenses
Depreciation (SLM)

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Repairs & Maintenance


Utilties (Fixed)
Admin. Overheads Incl
Interest On L.T. Loan
Loan Repayment
Total Fixed Costs
Variable Cost
Raw Materials
Packing
Interest On Working Capital Loans
Total Variable Costs
Contribution
Breakeven In %
Average Breakeven In %

Mott MacDonald
NEDFi

1
1
4
10
32

1
1
4
10
16
49

1
1
4
7
16
47

1
1
4
5
16
45

1
1
4
2
16
42

83
4
4.94
93
86
38%
43%

94
5
5.70
104
96
51%

104
6
6.33
116
107
44%

104
6
6.33
116
107
42%

104
6
6.33
116
107
40%

The IRR for the project is 20.6%, Average ROI is 79% and average DSCR is 2.78.
Particulars
Revenue
Profit Before Tax
Profit After Tax
LT Interest
Interest on Deposits
Depreciation
LT Loan Repayment
Deposit Repayment
Return on Investment (%)
Average ROI
Debt-Service Coverage Ratio
- Debt Service
- Coverage
DSCR
Average DSCR

Year of Operation
3
4

179
54.50
36.24
9.69
0.00
2.74
0.00
0.00
78%
79%

201
48.38
32.17
9.69
0.00
2.74
16.15
0.00
71%

223
60.96
40.54
7.27
0.00
2.74
16.15
0.00
82%

223
63.38
42.15
4.85
0.00
2.74
16.15
0.00
82%

223
65.80
43.76
2.42
0.00
2.74
16.15
0.00
82%

9.69
48.68
5.02
2.78

25.84
44.60
1.73

23.42
50.54
2.16

21.00
49.73
2.37

18.57
48.92
2.63

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20

Water Tanks

20.1

Introduction

Mott MacDonald
NEDFi

Roto Moulded Plastic Water Storage Tanks are made from Linear Low Density Polyethylene/Low
Density Polyethylene. These tanks are light in weight therefore, it is easy to fix them at the place of
choice. These tanks require no painting, no rotational moulding, product is formed inside a closed
mould rotating biaxial in two plains perpendicular to each other. In batch type-rock-N-Roll type
Rotational Moulding machines, frame of the machine is turned in a primary axis while mould is
rotated in secondary axis.
As rotational moulding does not involve any injection pressure and high shear rates, this process offers
certain basic advantages over other processes and techniques of plastic processing.

Complex parts can be moulded without need for post-assembly.

Low machinery cost relative to production capacity.

Double walled items can be produced.

Ease of colour and material change.

Multiple product and multi colours can be moulded at the same time

Minimum wastages.

High production capacity on selected parts.

Production design freedom.

These tanks keep water clean, odour free and maintain the quality of water stores intact. These tanks
are economical, practical and hygienic alternative of storing potable water in single or multi storied
residential units, industrial set-ups, commercial establishments and sites everywhere under the sun.
These tanks are becoming increasingly popular in India and have caught the eyes of many users for
their requirement of storing water for domestic and other purposes. These tanks are also used in
hostels, hospitals, schools, cinema houses and construction sites.
20.2

Market Potential

Roto-moulded Plastic Water storage tanks being lighter in weight are easy in handling and can be
easily fitted at any desired place, and are hence preferred and practically replacing the conventional
tanks of steel, cement concrete or stone. These tanks are available in market in various sizes and
shapes. The prices of these tanks are at the rate of Rs. 3 per litre of water capacity approximately. The
demand of plastic water storage tanks is increasing day-by-day. They are not only installed in the
individual houses and flats but are also fitted in factories, group housing schemes and multi-storeyed
buildings as well.

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Due to increase in the house building activities and preference given by the Government to provide
homes to the homeless people, the demand for plastic water storage tanks is likely to increase in the
years to come. Hence there is a good scope for establishing a few units for the manufacture of water
storage tanks by Roto Moulded process.
20.3

Plant Capacity

At 100% capacity utilisation, the plant is expected to produce 14640 nos of water tanks ranging in
capacity from 500 litres to 2000 litres. The plant is expected to run single shift of 8 hours with
operational days of 300.
20.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

(i)

Manufacturing Process

The HDPE granules are mixed with granules of black colour concentrates. These are extruded and
strands are chopped as granules so as to achieve uniform distribution of carbon black. The granules are
pulverized in a special pulverization system from 30 to 40- mesh powder. This powder is fed in the
mould in the required quantity. The burners of the Roto Moulding Machine are fired with the help of
LPG or Diesel and the moulds are heated to 300C. Molten powders when rotated in the heated
moulds form hollow storage tank. White inner coating is given for better finish. After proper time
when the tank is ready, the mould is cooled and opened and the tank is taken out. Finishing of the
tanks is done manually.
Roto Moulded Tanks are manufactured as per IS 12701:1989. This standard covers the requirements
of materials, dimensions, construction shape, tolerances on dimensions, fittings, workmanship,
performance requirements and inspection and testing of rotational moulded polythene water storages
tanks.
This standard is applicable only to water storage tanks subject to the following two conditions:
Own hydrostatic head of water
Tank with uniform flat base support
The internal and external surface of the water storage tank should be smooth, clean and free from other
hidden internal defects, such as air bubbles, pits and metallic or other foreign material inclusions. The
mould parting line and excess material near the top rim of the tank should be cut and finished to the
required leave Defects like air bubbles and pits at mould parting line and at top rim of the main man
hole should be repaired by hot air filler rod welding method.
(ii)

Plant and Machinery

The major equipment required by the unit for manufacturing plastic water tanks are as follows:
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Biaxial rotation Moulding Plant 3 arm


Moulding Machine
Chain pulley with stands
Pulverising Machine
Extruder Machine
Heavy duty grinding machine
Weighing Machine
Cutter machine for rejection Tank
Testing Equipments
Moulds
(iii)

Plant and Machinery Suppliers

The following is the list of plant and machinery suppliers of the above equipments.
Sl No
1

Name
M/s. National Plastics

M/s. Jai Industrial Works

M/s. Super India

M/s. Batliboi and Co. Ltd.

M/s. Fixopan Machine Pvt. Ltd

20.5

Communication Address
Plot No. 84, G.I.D.C., Odhav,
Ahmedabad-382415.
22-26 A, Industrial Estate,
22, Godam, Jaipur.
B-45, Lawrence Road,
New Delhi-35.
P. B. No. 479, V.B. Gandhi Road,
Fort, Mumbai-400023.
71, Nehru Place,
New Delhi-110019.

Raw Material & Utilities Requirement

The main raw material required for manufacturing plastic water tanks is HDPE and black master
batch. HDPE is available at the rate of Rs 62 per kg inclusive of tax, customs duty, transportation etc.
Black master batch is usually taken at 2% of the HDPE requirement and is priced at Rs 90 per kg.
The utilities required are power and water. Around 135 KW of Power and 4500 KLPA of water are
required.
20.6

Land & Built-up Area Requirement

The total land area is 1700 sq metres and the built up area is 1250 sq mt.

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20.7

Mott MacDonald
NEDFi

Manpower Requirement

Total manpower required would be 14 Nos of which administrative is 4 and factory staff is 10.

Personnel

Nos
1
1
1
1
5
2
2
1
14

Works Manager
Accountant-cum-Store Keeper
Administrative Assistant
Clerk
Skilled Workers
Semi Skilled Workers
Unskilled Workers
Peon/Watchman
Total
20.8

Project Cost/ Fixed Capital Requirement & Means of Finance:

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The total project cost is estimated at Rs 210.90 lakhs as follows.
Sl No
1
2
3
4
5
6
7
Total

Particulars
Site Development Cost
Building
Plant and Machinery
Miscellaneous Fixed Assets
Preliminary and Pre-Operative Expenses
Margin Money on Working Capital
Contingencies

Rs in Lakhs
3.40
100.00
58.66
8.36
3.94
26.50
10.04
210.90

The project cost may be financed under a debt equity ratio of 3: 1 as follows:
Means of Finance
Equity
Debt
Total
20.9

Rs in lakhs
52.72
158.17
210.90

Working Capital Requirement

The working capital requirement is given below.


Sl No.

Particulars
1

1
2

Net WC
Available Bank Finance

106.01
79.51

Years of Operation
2
3
4
121.15
90.86

136.30
102.22

151.44
113.58

5
151.44
113.58

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Margin Money

20.10

26.50

30.29

Mott MacDonald
NEDFi

34.07

37.86

37.86

Operating Expenses

The annual operating expenses estimated at Rs 306.75 lakhs (70% capacity utilization) is given below:
Sl No
Particulars
Rs in lakhs
1
Annual Land Charges
0.39
2
Raw materials
220.75
3
Utilities
7.58
4
Wages & Salaries
9.53
5
Overheads
5.39
6
Selling expenses
10.66
7
Packing expenses
10.66
8
Interest on term loan
23.73
9
Interest on Bank Finance for Working Capital
11.93
10
Depreciation
6.53
Total
306.75
20.11
Sl No

Profitability Estimates
Particulars

Production/Sales
Installed Capacity in nos
Capacity Utilization
Estimated Production
Gross Sales Revenue
Expenses
Raw Material Consumption
Utilities
Administrative Overheads
Salaries
Sales Expenses
Packing Expenses
Loan Repayment
Lease Rentals
Total
Gross Profit
Financial Expenses
Interest On Term Loan
Interest On Working Capital
Sub Total
Depreciation
Profit Before Tax
Provision For Tax

Yr -1

Yr-2

Year
Yr -3

14640
70%
10248

14640
80%
11712

14640
90%
13176

14640
100%
14640

14640
100%
14640

426

487

548

609

609

215
8
5
10
11
11
0
0
259
167

246
8
5
10
12
12
40
0
333
155

276
8
5
10
14
14
40
0
366
182

307
8
5
10
15
15
40
0
400
209

307
8
5
10
15
15
40
0
400
209

24
12
36
7
125
42

24
14
37
7
111
37

18
15
33
7
142
48

12
17
29
7
174
58

6
17
23
7
179
60

Yr -4

Yr-5

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Profit After Tax


20.12

83

Mott MacDonald
NEDFi

74

95

115

119

Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

426

487

548

609

609

10
11
7
3
8
5
24
66

10
12
7
3
8
5
24
40
108

10
14
7
3
8
5
18
40
103

10
15
7
3
8
5
12
40
99

10
15
7
3
8
5
6
40
93

215
11
11.93
238
189
35%
40%

246
12
13.63
272
216
50%

276
14
15.33
305
243
43%

307
15
17.04
339
270
37%

307
15
17.04
339
270
34%

Financial Indicators

The Average Break Even Point for the project is 40%.


Particulars
Sales Realisation
Fixed Costs
Salaries
Fixed Selling Expenses
Depreciation (SLM)
Repairs & Maintenance
Utilities (Fixed)
Admin. Overheads Incl Insurance
Interest On L.T. Loan
Loan Repayment
Total Fixed Costs
Variable Cost
Raw Materials
Packing
Interest On Working Capital Loans
Total Variable Costs
Contribution
Breakeven In %
Average Breakeven In %

The IRR for the project is 20%, Average ROI is 80% and average DSCR is 2.80.
Particulars
Revenue
Profit Before Tax
Profit After Tax
LT Interest
Depreciation
LT Loan Repayment
Return on Investment (%)
Average ROI
Debt-Service Coverage Ratio
- Debt Service
- Coverage
DSCR
Average DSCR

Year of Operation
3

426
124.90
83.06
23.73
6.53
0.00
74%
80%

487
110.79
73.68
23.73
6.53
39.54
67%

23.73
113.31
4.78
2.80

63.27
103.93
1.64

548
142.16
94.54
17.79
6.53
39.54
79%

609
173.52
115.39
11.86
6.53
39.54
91%

609
179.46
119.34
5.93
6.53
39.54
91%

57.34
118.86
2.07

51.41
133.79
2.60

45.47
131.80
2.90

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21

Plastic Crates

21.1

Introduction

Mott MacDonald
NEDFi

Crates are material handling containers which can be used for storage, transport or distribution and
handling of products. Traditionally crates in India were manufactured from wood but with
developments in plastics processing and conservation of environment issues gaining importance in
developed societies, most of the material handling crates are being manufactured to size to suit the end
use, but are predominantly made from High Density Polyethylene (HDPE) and sometimes from
Polypropylene (PP). These injection moulded crates have a long life and are easy to handle due to its
light weight, and have many other advantages over the traditional wooden crates.
The advantages of using plastic crates are:

Considerable reduction in weight and hence easy handling and transportation

Freedom from sharp corners and splinters facilitating safe handling

Complete freedom from corrosion unlike in the case of metal crates

No noise while handling unlike metal crates

Requires negligible maintenance compared to wooden and metal crates.

Have fairly long life and are suitable for multiple trips.

Good resistance to chemicals and harsh environment. Can be made in variety of colors and
hence have better sales appeal.
21.2

Market Potential

In India, at present there are several manufacturers of large injection moulded crates. This segment of
business is dominated mainly by organized sector players. The major players in injection moulded
crates are:

Nilkamal Crates and Bins

Bright Brothers

Supreme Industries Limited

Prince Plastics

Synthetic Moulders

Gold Plast

The following is the sectors and the use of crates in these sectors.
Sector

Use
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Soft drink industry


Milk and dairy products
Fisheries, and Marine
Automobile industry
Fruits and vegetable
Electronic and electricals
Pharmaceuticals
Agro-products
Yarn and textiles industry
Defense Sector

Mott MacDonald
NEDFi

Storage, handling, transport and distribution.


Handling, transport, distribution.
Storage, handling, transport and meat products distribution.
Storage
Storage, handling, transport.
Storage, handling.
Storage, handling.
Storage, handling
Storage, handling
Storage, handling of bombs

Following types of crates are generally available in Market and are popular amongst end-users.

Fully closed crates - with all surfaces of crates in solid except top.

Grilled crates - with all sidewalls grilled and bottom close.

Totally grilled crates - with all sides and bottom also grilled.

Crates with lids - a lid on top to protect the contents.

Folding crates - entire crate can be folded to a flat assembly to save space when not in use.

Bins - modified shape of crate so that contents can be removed from front without unloading the
bins stacked over it.

Stacking and nesting crates - height of crate can be reduced when stored in nesting positions.

Soft drink crates - these are available with partitions to separate bottles rattling with each other.

Milk pouch crate.

Tetra pack crates.

Crates for handling Printed Circuit Boards.

The traditional segments of crates experience stiff competition and hence, the crates manufacturers
are always in look out for newer and newer application. The demand for crates is increasing from a
diverse range of businesses. The usage of crates especially in agri business is full of promise as it has
demonstrated its superiority in handling, storing and transporting of agricultural produce by reducing
the damage level of food products by almost 30%. The entry of crates in agriculture is likely to
revolutionize the crates business and this segment is expected to drive the future growth of this
business.

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21.3

Mott MacDonald
NEDFi

Plant Capacity

The typical size of the project for manufacture of injection moulded crates could have an installed
capacity of 689 MT per annum. This would mean that 3 lakh pieces of crates having an average
weight of 2.25 kg per crate could be manufactured at 100% capacity utilisation.
21.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

(i)

Manufacturing Process

The manufacturing process of injection moulded crate is simple in concept. The Poly Propylene
granules are fed via a regulated hopper into a homogenous molten mass by application of heat and
shearing action of continuously rotating extruded screw, which also keeps pushing the plastic melt
forward. The melt gets collected at the forward end of the extruder cylinder and is pushed into the
mould cavity by the screw, now acting as a hydraulic piston. The mould is kept at pre-specified
temperature and once injected, the plastic melt is held under high pressure to ensure that the material
reaches all the ends of the mould. In crates moulding, the moulds used have comparatively very large
depth.
The mould is opened after plastic melt has solidified sufficiently and the moulded item is ejected by
means of ejector pins or plates. During the cooling cycle in the mould, the extruder screw prepares
another batch of plastic melt, ready to be injected, and thus the cycle goes on continuously. The
moulded articles usually do not require any finishing operation other than removal of wastage.
Otherwise, after visual inspection, they are kept for curing for about 40 to 50 hours and then
despatched.
(ii)

Plant and Machinery Suppliers

The following is the list of plant and machinery suppliers


Sl No
1

Name
M/S Bonhomie Plastics Pvt. Ltd.

Naroto N.A.Group of Companies

21.5

Communication Address
14/a, Ujagar Indl. Estate, Next To Dukes,
Deonar,Mumbai-400088,Maharashtra
Plot No.3725, Phase IV, GIDC,Vatva I.E.,
Ahmedabad - 382445 India
Tel. No.:079 25840374 / 25841821.
Fax : 079 25840809.

Raw Material & Utilities Requirement

The major raw material required for the project would be polypropylene / HDPE of injection moulding
grade. In addition, some stabilisers and additives would also be needed. The raw material required
would be around 689 MT at 100% capacity utilisation. The unit has been assumed to operate at 70%,
80% and 90% of its installed capacity in the first, second and third year and at 100% capacity from the
fourth year onwards of its operation.
The utilities required are power and water. Around 75 KW of Power and 600 KLPA of water are
required.
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21.6

Mott MacDonald
NEDFi

Land & Built-up Area Requirement

The total land area is 1000 sq metres and the built up area is 750 sq mt.
21.7

Manpower Requirement

Total manpower required would be 14 Nos of which administrative is 4 and factory staff is 10.
Personnel
Nos
Works Manager
1
Accountant-cum-Store Keeper
1
Administrative Assistant
1
Clerk
1
Skilled Workers
5
Semi Skilled Workers
2
Unskilled Workers
2
Peon/Watchman
1
Total
14
21.8

Project Cost/ Fixed Capital Requirement & Means of Finance

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The total project cost estimated at Rs 215.26 lakhs is as follows.
Sl No
1
2
3
4
5
6
7
Total

Project Cost
Site Development Cost
Building
Plant and Machinery
Miscellaneous Fixed Assets
Preliminary and Pre-Operative Expenses
Margin Money on Working Capital
Contingencies

Rs in Lakhs
2.00
60.00
94.91
7.80
4.02
36.28
10.25
215.26

Of this, the project cost may be financed with a debt equity ratio of 3:1 as under:
Means of Finance
Promoters contribution
Term Loan
Total
21.9

Rs in lakhs
53.81
161.44
215.26

Working Capital Requirement

The working capital requirement is given below.


Sl No

Particulars
1

Years of Operation
2
3
4

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1
2
3

Net Working Capital


Available Bank Finance
Margin Money

21.10

145.12
108.84
36.28

165.85
124.39
41.46

Mott MacDonald
NEDFi

186.58
139.93
46.64

207.31
155.48
51.83

207.31
155.48
51.83

Operating Expenses

The annual operating expenses estimated at Rs 432.56 lakhs (70% capacity utilization) is given below:
Sl No
Particulars
Rs in lakhs
1
Annual Land Charges
0.23
2
Raw materials
339.73
3
Utilities
4.38
4
Wages & Salaries
9.53
5
Overheads
3.50
6
Selling expenses
14.18
7
Packing Expenses
14.18
8
Interest on term loan
24.22
9
Interest on Bank Finance for Working Capital
16.33
10
Depreciation
6.52
Total
432.56
21.11
Sl No

Profitability Estimates
Particulars

Production/Sales
Installed Capacity in Lakh nos
Capacity Utilization
Estimated Production in lakh nos
Gross Sales Revenue
Expenses
Raw Material Consumption
Utilities
Administrative Overheads
Salaries
Sales Expenses
Packing Expenses
Loan Repayment
Lease Rentals
Total
Gross Profit
Financial Expenses
Interest On Term Loan
Interest On Working Capital
Sub Total
Depreciation

Yr -1

Yr-2

Year
Yr -3

3
70%
2.1

3
80%
2.4

3
90%
2.7

3
100%
3

3
100%
3

567

648

729

810

810

340
4
4
10
14
14
0
0
386
181

388
4
4
10
16
16
40
0
479
169

437
4
4
10
18
18
40
0
531
198

485
4
4
10
20
20
40
0
584
226

485
4
4
10
20
20
40
0
584
226

24
16
41
7

24
19
43
7

18
21
39
7

12
23
35
7

6
23
29
7

Yr -4

Yr-5

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Profit Before Tax


Provision For Tax
Profit After Tax
21.12

134
45
89

Mott MacDonald
NEDFi

120
40
80

152
51
101

184
62
123

190
64
127

Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

567

648

729

810

810

10
14
7
3
4
4
24
65

10
16
7
3
4
4
24
40
108

10
18
7
3
4
4
18
40
103

10
20
7
3
4
4
12
40
99

10
20
7
3
4
4
6
40
93

340
14
16.33
370
197
33%
38%

388
16
18.66
423
225
48%

437
18
20.99
476
253
41%

485
20
23.32
529
281
35%

485
20
23.32
529
281
33%

Financial Indicators

The Average Break Even Point for the project is 38%.


Sales Realisation
Fixed Costs
Salaries
Fixed Selling Expenses
Depreciation (SLM)
Repairs & Maintenance
Utilities (Fixed)
Admin. Overheads
Interest On L.T. Loan
Loan Repayment
Total Fixed Costs
Variable Cost
Raw Materials
Packing
Interest On Working Capital Loans
Total Variable Costs
Contribution
Breakeven In %
Average Breakeven In %

The IRR for the project is 22.8%, Average ROI is 83% and average DSCR is 2.90.
Particulars
Revenue
Profit Before Tax
Profit After Tax
LT Interest
Interest on Deposits
Depreciation
LT Loan Repayment
Deposit Repayment
Return on Investment (%)
Average ROI
Debt-Service Coverage Ratio
- Debt Service
- Coverage

Year of Operation
3

567
134.21
89.25
24.22
0.00

648
119.94
79.76
24.22
0.00

729
152.08
101.13
18.16
0.00

810
184.22
122.50
12.11
0.00

810
190.27
126.53
6.05
0.00

6.52
0.00
0.00
77%
83%

6.52
40.36
0.00
70%

6.52
40.36
0.00
82%

6.52
40.36
0.00
94%

6.52
40.36
0.00
94%

24.22
119.99

64.58
110.50

58.52
125.82

52.47
141.13

46.41
139.11

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DSCR
Average DSCR

4.95
2.90

1.71

2.15

Mott MacDonald
NEDFi

2.69

3.00

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22

Tarpaulins and Covers

22.1

Introduction

Mott MacDonald
NEDFi

Polymer based Polyethylene Covers (Heavy Duty) include High Density Polyethylene tarpaulins and
covers. PE tarpaulins are woven High Density Polyethylene (HDPE) fabrics laminated with Linear
Low Density Polyethylene (L LDPE) film, welded ( heat sealed) at joints and edges, reinforced with
Polyethylene (PE) or Polypropylene (PP) rope hemming and eyelets provided at regular intervals all
round. PE covers however are HDPE Woven fabrics coated / laminated with LDPE and welded (heat
sealed) at joints. Polyethylene covers are usually not provided with rope hemming and eyelets.
The weight of HDPE tarpaulins in grams per square meter (gsm) ranges from 90 for lighter tarpaulins
to 270 for heavier tarpaulins. HDPE tarpaulin should conform to the bureau of Indian Standards IS
No: 7903-1984 which deals with the material specification, constructional details, properties, marking,
packing, sampling and testing procedure. There is no BIS standard dealing with covers other than
tarpaulins. However, for fumigation covers which are used for food grain storage, there is a standard
IS: 13217-1991.
22.2

Market Potential

Tarpaulins are used for various applications of protections from rain, dew, dust and sun for different
materials. They are used in the following listed applications:

Stock Pile Cover

Bale Wraps

Truck Liners and Covers

Fumigation Covers

Railway Wagon Covers

Floor linings for Storage

Tents

Construction Site Stock Cover

Roof Covers

Car and Motor Cycle Covers

Swimming Pool Covers

Equipment Covers

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Traditionally cotton canvas tarpaulins have been used in many of the above uses but due to some of its
inherent drawbacks, HDPE tarpaulins have already captured market share in all above end use sectors.
This market share is presently small but is expanding and growing fast. In developed countries, HDPE
tarpaulins enjoy the largest market share among all types of tarpaulins.
Among large users of covers are Food Corporation of Indias (FCI) warehouses which instead of using
HDPE tarpaulins in large quantities, use fumigation covers manufactured from HDPE woven fabric
coated or laminated with low density polyethylene with no rope hemming, rope lashing, eyeleting etc.
These HDPE sheets are cheaper than HDPE tarpaulins and serve their purpose of covers for food
stocks. FCI also consumes cotton canvas tarpaulins and small quantities of HDPE tarpaulins.
In the transportation sector, trucks largely use cotton canvas tarpaulins. How ever, for truck liner
applications, they are now employing HDPE tarpaulin sheets. Defence authorities also regularly use
tarpaulins of heavier range but presently the use of HDPE tarpaulins is limited in this sector. Cement,
fertiliser and sugar manufacturing industries are also using HDPE tarpaulins which are witnessing
impressive growth trends.
22.3

Plant Capacity

Same plant and machinery can produce HDPE tarpaulins of different weights (gsm). The difference in
gsm is achieved by

Different deniers of tapes used in weaving

Different weave mesh expressed as Tapes per square inch

Different lamination thicknesses

The envisaged plant shall produce HDPE Tarpaulins and sheets rolls (covers) in the gsm of
100,125,150,180,200 and 250 with the flexibility to produce varying quantities of any grade. The unit
price per square meter of tarpaulin in each case will vary and increase as the gsm increases. However,
the price in terms of per kg weight of tarpaulins will remain the same and also the overall production
quantity will remain the same.
The installed capacity is 3500 Tonnes per annum.
22.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

(i)

Manufacturing Process

The process of manufacturing is divided into the following stages:


Manufacturing of tapes from HDPE granules on extrusion tape plant
Weaving of tapes into fabric
Lamination of LLDPE extrusion coating on fabric
Cutting, welding (heat sealing) and hemming
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Eyelet punching
Marking and Printing
Bailing and Packing
They are briefly described below:
Manufacture of tapes
HDPE granules of Raffia grade, the main raw material for tape manufacturing are mixed in the doser
with the required quantities of master batches for colouration and stabilisation and then extruded by a
screw configuration for metering, mixing, sheering, melting and final mixing to develop high pressure
to enable plastic material to have more oriented grain structure locked in the cast film by cold water.
The film is slitted by means of a multislitter for required tape width. The orientation of the tapes is
then done by stretching through hot air oven to adopt a chain structure. The tape is then annealed by
heating and cooling arrangement before winding to get adequately tight wound bobbin for use on
circular looms. The tape with different deniers and strength are produced on the same extruder by
suitable changes in the operating parameters of the extruder.
Weaving of tapes into fabric
The extruded tapes as available above on the bobbins and arranged on creel are fed to the circular
weaving machines for weaving the desired type of fabric. The circular weaving machines (looms) are
4 shuttle or 6 shuttle looms. The output of these looms is in the tubular form is continuously cut
through a cutter placed at the circular machine discharge and then single flat fabric is wound on the
roll form. Each roll containing approx 1000 metre fabric is formed which is then sent to the lamination
machine.
Lamination of LLDPE extrusion coating on fabric
The rolls obtained from circular weaving machine above are fed to the lamination plant which has an
extruder and laminator. The LLDPE granules along with coloured master batches are fed to the
extruder where the LLDPE film is extruded and is laminated on both sides of the fabric directly, thus
offering better and uniform laminations on fabric surface. Here exact thickness of lamination is to be
done to give the fabric a preset weight and achieve waterproofness. In order for tarpaulins to be 100%
waterproof, the lamination has to be defect-free i.e. without any pinholes.
Cutting, welding (heat sealing) and hemming
The coloured laminated rolls of HDPE woven fabric are welded together to make the desired width of
fabric by the use of automatic central welding machine working on heat sealing principle. While the
central welding of the rolls is in progress, the side welding is also carried out simultaneously with the
PP or PE rope inserted in sides to give tarpaulin of desired strength. The tarpaulin is then cut into
desired length and again the process of side welding along the cut side is carried out with PP/PE rope
insertions. The individual panels if required additionally are added one after another along with the
width to produce the desired dimensions of tarpaulin and covers.
Eyelet punching
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After welding, the eyelets are punched on all the four sides of the tarpaulin at a distance of 1 meter or
upto 1.5 meter as agreed to between the buyer and seller. Eyeletting will be done only in the case of
tarpaulins.
Marking and Printing
After the tarpaulin or cover is manufactured, it is printed at one corner on one side with the
manufacturers name, trade mark, if any, year of manufacture and the size. It can also be IS marked
040-23076461
Bailing and Packing
Tarpaulins and covers made above are folded as per clients instructions and individual tarpaulin is
then placed into the polyethylene bags. These individually packed tarpaulins are then bailed in suitable
packing size.
(ii)

Plant and Machinery

Critical plant and equipment for the tarpaulin manufacture involve the following equipment:
Extrusion Tape Lines for Raffia Tape Manufacture
Circular Weaving Machines
Laminating Machines
Welding Machines
(iii)

Plant and Machinery Suppliers

The following table gives the name and address of suppliers along with the machinery type suitable for
the process and product.
Sl No
1

Name
Lohia Starlinger Ltd

DGP Windsor India Ltd

J.P.Industries

Brimco Plastic Machinery (P) Ltd

22.5

Communication Address
D-3/A,
Panki
Industrial
Estate,
Kanpur - 208 022, INDIA
5403, Phase IV, G. I. D. C. Industrial Area,
Vatva, Ahmedabad 380 44, Gujarat
1701,
G.I.D.C.
Industrial
Estate
Ankleshwar
393
002,
Dist. Bharuch, Gujarat, India.
Brimco House, 55 Govt. Indl. Estate,Charkop,
Kandivli
(W),
Mumbai 400067 ,Maharashtra, India

Raw Material & Utilities Requirement

The major raw material required for the project is as follows:


Raffia grade high density polyethylene (HDPE)
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Lamination grade linear low density Polyethylene (LLDPE)


Master batches
Polyethylene or Polypropylene Rope
The consumption ratio of HDPE to LDPE has been taken at 60:40. The raw material required would
be around 3887 MT at 100% capacity utilisation.
The unit has been assumed to operate at 70%, 80% and 90% of its installed capacity in the first,
second and third year and 100% capacity from 4th year onwards.
The main utilities required are power and water. The power requirement is 1365 KW and water is
6000 KLPA.
22.6

Land & Built-up Area Requirement

The total land area is 6000 sq metres and the built up area is 4000 sq mt.
22.7

Manpower Requirement

Total manpower required would be 212 nos of which management and administrative is 29 and
factory staff is 183.
Staff
Nos
Management Staff
General Manager
1
Production Manager
1
Finance Manager
1
Marketing Manager
1
Purchase manager
1
Personnel Manager
1
Account Staff
3
Marketing Staff
4
Personnel Staff
3
Security officer
3
Stores keeper
3
Computer operator
4
Peons
3
Sub Total
29
Factory
Supervisory
39
Skilled
60
Unskilled
84
Sub Total
183
Total
212

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22.8

Mott MacDonald
NEDFi

Project Cost/ Fixed Capital Requirement & Means of Finance

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The total project cost is estimated at Rs 2016.69 lakhs as follows.

Sl No
1
2
3
4
5
6
7

Particulars
Site Development Cost
Building
Plant and Machinery
Miscellaneous Fixed Assets
Preliminary and Pre-Operative Expenses
Margin Money on Working Capital
Contingencies
Total

Rs in Lakhs
12.00
320.00
1239.77
61.24
37.66
249.99
96.03
2016.69

The project cost may be financed with a debt equity ratio of 3:1 as under:
Means of Finance
Promoters contribution
Term Loan
Total
22.9

Rs in lakhs
504.17
1512.51
2016.69

Working Capital Requirement

The working capital requirement is given below.


Sl No.

Particulars
1

1
2
3
22.10

Net Working Capital


Available Bank Finance
Margin Money

2
999.94
749.96
249.99

Years of Operation
3
4

1142.79
857.09
285.70

1285.64
964.23
321.41

1428.49
1071.37
357.12

5
1428.49
1071.37
357.12

Operating Expenses

The annual operating expenses estimated at Rs 2882.93 lakhs (70% capacity utilization) is given
below:
Sl No
Particulars
Rs in lakhs
1
Land Lease Rental
1.38
2
Raw materials
1969.78
3
Utilities
70.65
4
Wages & Salaries
199.58
5
Overheads
34.83
6
Selling expenses
101.06
7
Packing expenses
101.06
8
Interest on term loan
226.88
9
Interest on Bank Finance for Working Capital
112.49
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10

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Depreciation

65.23
2882.93

Total
22.11

Profitability Estimates

Sl No

Particulars
Yr -1
Yr-2
Production/Sales
Installed Capacity in MT
3500
3500
Capacity Utilization
70%
80%
Estimated Production in MT
2450
2800
Gross Sales Revenue
4043
4620

Year
Yr -3
3500
90%
3150

Yr -4
3500
100%
3500

Yr-5
3500
100%
3500

5198

5775

5775

Expenses
Raw Material Consumption
Utilities
Administrative Overheads
Salaries
Sales Expenses
Packing Expenses
Loan Repayment
Lease Rentals
Total
Gross Profit
Financial Expenses
Interest On Term Loan
Interest On Working Capital
Sub Total
Depreciation
Profit Before Tax
Provision For Tax
Profit After Tax
22.12

1970
71
35
200
101
101
0
1
2478
1564

2251
71
35
200
116
116
303
1
3091
1529

2533
71
35
200
130
130
303
1
3401
1796

2814
71
35
200
144
144
303
1
3712
2063

2814
71
35
200
144
144
303
1
3712
2063

227
112
339
65
1,160
388
771

227
129
355
65
1,108
371
737

182
145
326
65
1,405
471
934

136
161
297
65
1,701
570
1,131

91
161
251
65
1,747
585
1,162

Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

4043

4620

5198

5775

5775

200
101
65
26
71
35

200
116
65
26
71
35

200
130
65
26
71
35

200
144
65
26
71
35

200
144
65
26
71
35

Financial Indicators

The Average Break Even Point for the project is 40%.


Particulars
Sales Realisation
Fixed Costs
Salaries
Fixed Selling Expenses
Depreciation (SLM)
Repairs & Maintenance
Utilities (Fixed)
Admin. Overheads

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Interest On L.T. Loan


Loan Repayment
Total Fixed Costs
Variable Cost
Raw Materials
Packing
Interest On Working Capital Loans
Total Variable Costs
Contribution
Breakeven In %
Average Breakeven In %

Mott MacDonald
NEDFi

227
725

227
303
1,042

182
303
1,011

136
303
980

91
303
934

1970
101
112.49
2183
1,859
39%
40%

2251
116
128.56
2495
2,125
49%

2533
130
144.63
2807
2,390
42%

2814
144
160.70
3119
2,656
37%

2814
144
160.70
3119
2,656
35%

The IRR for the project is 24.8% , average ROI is 82% and average DSCR is 3.09.
Particulars
Revenue
Profit Before Tax
Profit After Tax
LT Interest
Interest on Deposits
Depreciation
LT Loan Repayment
Deposit Repayment
Return on Investment (%)
Average ROI
Debt-Service Coverage Ratio
- Debt Service
- Coverage
DSCR
Average DSCR

Year of Operation
3

4043
1159.57
771.11
226.88
0.00
65.23
0.00
0.00
72%
82%

4620
1108.22
736.97
226.88
0.00
65.23
302.50
0.00
69%

226.88
1063.22
4.69
3.09

529.38
1029.07
1.94

5198
1404.75
934.16
181.50
0.00
65.23
302.50
0.00
82%

5775
1701.29
1131.36
136.13
0.00
65.23
302.50
0.00
94%

5775
1746.66
1161.53
90.75
0.00
65.23
302.50
0.00
94%

484.00
1180.89
2.44

438.63
1332.71
3.04

393.25
1317.51
3.35

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23

Bi-Axially Oriented Polypropylene (BOPP) Films

23.1

Introduction

Mott MacDonald
NEDFi

The packaging format is influenced by a wide range of factors such as product composition, logistics,
legal & regulatory compulsions, end usage etc. Its primary purpose is to retain the quantity &
characteristics of the packaged product as well as enhance the shelf life (especially in case of edible
products).
Flexible packaging is an integral part of the packaging segment and includes packaging for FMCG
products, ready to eat foods, confectionery items, over- wraps for various applications etc. Flexible
packaging has several key use segments viz. retail and institutional food & non-food products, medical
& pharmaceutical packaging, industrial applications and consumer products which involve the usage
of different types of film.
BOPP films serve as a raw material for the flexible packaging industry and also find application in
industrial products (capacitors & adhesive tapes). They are also cost-effective and available in sizes of
nine microns and above. BOPP films are moisture-resistant and increase the life of products by almost
23 times.
These films can be further segregated into the following categories:

Commodity Films (Transparent Films)

These films are in the lowest band of the BOPP film spectrum and are classified as a commodity
product. They account for over 70% of the total BOPP film consumed globally. On account of the
commodity nature of this film, this segment is characterised by low margins and is extremely price
sensitive.

Intermediaries (Metallised BOPP films)

Films in this segment are customised and come in the following forms viz. opaque, pearlised,
capacitor grade, adhesive label grade, high barrier metallised etc. These are films which are either
treated (with chemicals, adhesives, processes viz. carona treatment, for better printability) or laminated
so as to meet the specific requirements of the packaged product. Over the last 5 years, the off take of
these films has witnessed the highest growth rate of 10.8%p.a. and the trend is expected to gather
momentum going forward, on account of cost effectiveness and other properties viz. barrier to oxygen,
moisture, UV light barrier properties & suitability for attractive presentation of snacks and
confectionery.

Specialty Films (Thermal laminated films)

Films such as Thermal Laminated, special shrink, in mould labels, thin & rough capacitor grades fall
under this segment. These films necessitate high degree of customization in comparison to
Intermediaries and are largely consumed in mature markets like USA, Western Europe and Japan. In
this segment, the demand for Thermal laminated films is estimated at approx Rs18Billion (with USA
accounting for about Rs8bn). The growth in demand for this film over the past few years has been
exponential and the same is expected to sustain, considering its application in stationery products as
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well as cost benefits (No adhesive & curing time required). Moreover, the environment friendly nature
of these films is contributing to their increasing usage in mature markets and consequently leading to
higher off take from these geographies.
These films are available in various thicknesses ranging from 10 to 50 microns, which are used for
various applications described later. BOPP film is classified in the clear film category along with
cellophane, polyester film, PPTQ Films and UPPVC films, which have many applications in common
and hence, are competing within.
23.2

Market Potential

The market leaders in India in the BOPP film segment are Cosmo Films Pvt Ltd, Jindal Polyfilms Ltd.,
Uflex, Max India , Xpro India etc.
The factors which would lead to the demand growth of BOPP Films are:
 Growth in packaging industry
 Additional growth based on replacement trends (i.e. Switching over to BOPP) being observed
in end-use segments
 New emerging application areas like labels, etc.
23.3

Plant Capacity

For manufacturing BOPP films, we have considered the plant having an installed capacity of 30,000
MT per annum. This capacity has been considered because this is the least capacity at which the plant
will be viable. The plant is expected to run on a continuous basis (i.e. 24 hours) for a total 300 days
per annum.
23.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

(i)

Manufacturing Process

BOPP film can be manufactured using any of the following 2 techniques viz. Tubular Bubble process
or Cast Stenter process.
The first technique is more suited for small scale operators and not widely used due to the lower
compressive and tensile strength of the film produced. The second method is more widely used and
preferred by most large scale BOPP manufacturers across the globe.
The process consists of the following steps:
Dosing & mixing: For each of the core layers depending on the film construction (3 layer or 5
layer), granulated PP resin is dosed and mixed with additives and the scrap film from the edge of the
finished BOPP film is trimmed, in order to give the film desired characteristics & achieve minimum
wastage.
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Extrusion: The mixed material for each of the layers is melted and plasticised to achieve the required
homogenous state and is then filtered and transported to the die unit.
Die Casting: The melted mixed material of each of the layers is cast to produce a flat layered cast
sheet, which is then cooled.
Machine Direction Orientation (vertical stretching): The cast sheet is then heated up by preheating
the rolls & is vertically stretched before annealing (heat setting to stabilise the stretched sheet).
Transversal Direction Orientation (horizontal stretching): The cast sheet is horizontally stretched and
then annealed again to determine the width and other properties of the film.
Pull Roll Station: The film is trimmed, measured for thickness and surface treated by the carona
treatment unit (which makes it receptive to printing)
Winding & Slitting: The film is then wound onto metal rolls, allowed to cool and unwound from the
metal rolls, slit to the requisite width and wound again for despatch.
(ii)

Plant and Machinery

The list of major plant and machinery for the BOPP Project is given below:

Extrusion Plant with multilayer die


Casting Unit
Machine Direction Orientation Unit
Transverse Direction Orientation Unit
Corona Treatment Unit
Edge Trimming Unit
Slitter
Material Handling Equipments
Storage Systems for Rolls
Pneumatic Conveyors
Material Handling Equipments
Water Softening Plant
Primary and Secondary Rewinders
Scrap winders
Regranulation System
Air Cooling System
Chilling Plant
DG Sets

(iii)

Plant and Machinery Suppliers

The following is the list of plant and machinery suppliers of the above equipments.
1

Bruckner AG India, 03, Business Avenue, Sanghvi Nagar, Parihar Chowk, Aundh, Pune411007
Middle East India Office, Mumbai 400104
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Kerkrade

Mitsubishi, Japan

23.5

Mott MacDonald
NEDFi

Raw Material & Utilities Requirement

The key raw materials used for BOPP film manufacture are:
Polypropylene (Homo-polymer / Copolymer)
Additives and Fillers (Calcium Carbonate, Mica, Chalk, etc)
The raw material required would be around 30000 MT at 100% capacity utilisation. The unit has been
assumed to operate at 80% and 90% of its installed capacity in the first & second year and at 100%
capacity from the third year and onwards of its operation.
The utilities required are power and water. Around 7500 KW of Power and 3000 KLPA of water are
required.
23.6

Land & Built-up Area Requirement

The land required would be approx 7000 sq.m with a built-up area of approx 5000 sq. m.
23.7

Manpower Requirement

Total manpower required would be as detailed out below. A margin of 25% has been considered for
other benefits for the staff.
Staff
General Manager
Works Manager
Accountant-cum-Store Keeper
Assistant Accountant
Administrative Manager
Administrative Assistant
Clerk
Skilled Workers
Semi Skilled Workers
Unskilled Workers
Peon/Watchman
Total
23.8

Nos
1
3
4
2
1
1
5
10
8
20
10
64

Project Cost/ Fixed Capital Requirement & Means of Finance

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
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as part of operating cost. The total project cost is estimated at Rs 13704.83 Lakhs (Rs.137.04 Crores)
as follows.

Sl No
1
2
3
4
5
6
7

Particulars
Site Development Cost
Building
Plant and Machinery
Miscellaneous Fixed Assets
Preliminary and Pre-Operative Expenses
Margin Money on Working Capital
Contingencies
Total

Rs in Lakhs
14.00
400.00
10450.14
39.85
255.93
1892.30
652.61
13704.83

This project cost may be financed at a debt equity ratio of 3:1 as follows.

Means of Finance

Rs in lakhs

Equity
Debt
Total
23.9

3426.21
10278.62
13704.83
Working Capital Requirement

The total working capital requirement is given below:


Particulars
Net WC
Available Bank Finance
Margin Money
23.10

Year 1
7569.21
5676.90
1892.30

Year 2
8515.36
6386.52
2128.84

Year 3
9461.51
7096.13
2365.38

Year 4

Year 5

9461.51
7096.13
2365.38

9461.51
7096.13
2365.38

Operating Expenses

The annual operating expenses estimated at Rs 21463.60 lakhs (80% capacity utilization) is given
below:

Sl No
1
2
3
4
5
6
7
8

Particulars
Annual Land Charges
Raw materials
Utilities
Wages & Salaries
Overheads
Selling expenses
Packing expenses
Interest on term loan

Rs in lakhs
1.61
16554.20
373.20
28.28
128.50
750.01
750.01
1593.19
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9
10
Total
23.11

Mott MacDonald
NEDFi

Interest on Bank Finance for Working Capital


Depreciation

851.54
434.69
21463.60

Profitability Estimates
(Rs. in Lakhs)

Sl No

Particulars

Production/Sales
Installed Capacity
Capacity Utilization
Estimated Production
Gross Sales Revenue
Expenses
Raw Material Consumption
Utilities
Administrative Overheads
Salaries
Sales Expenses
Packing Expenses
Loan Repayment
Lease Rentals
Total
Gross Profit
Financial Expenses
Interest On Term Loan
Interest On Working Capital
Sub Total
Depreciation
Profit Before Tax
Provision For Tax
Profit After Tax
23.12

Yr -1

Yr-2

Year
Yr -3

30000
80%
24000

30000
90%
27000

30000
100%
30000

30000
100%
30000

30000
100%
30000

30000

33750

37500

37500

37500

16554
373
128
28
750
750
0
1.61
18213
11788

18623
373
128
28
844
844
2570
1.61
23412
10338

20693
373
128
28
938
938
2570
1.61
25669
11831

20693
373
128
28
938
938
2570
1.61
25669
11831

20693
373
128
28
938
938
2570
1.61
25669
11831

1593
852
2445
435
8908
2984
5924

1593
958
2551
435
7352
2463
4889

1195
1064
2259
435
9137
3061
6076

797
1064
1861
435
9536
3194
6341

398
1064
1463
435
9934
3328
6606

Yr -4

Yr-5

Financial Indicators

The Average Break Even Point for the project is 37%.


Sales Realisation
Fixed Costs
Salaries
Fixed Selling Expenses
Depreciation (SLM)

Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

30000

33750

37500

37500

37500

28
750
435

28
844
435

28
938
435

28
938
435

28
938
435

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Repairs & Maintenance


Utilities (Fixed)
Admin. Overheads Incl
Interest On L.T. Loan
Loan Repayment
Total Fixed Costs
Variable Cost
Raw Materials
Packing
Interest On Working Capital Loans
Total Variable Costs
Contribution
Breakeven In %
Average Breakeven

Mott MacDonald
NEDFi

167
373
128
1,593
3,475

167
373
128
1,593
2,570
6,138

167
373
128
1,195
2,570
5,834

167
373
128
797
2,570
5,436

167
373
128
398
2,570
5,037

16554
750
851.54
18156
11844
29%
37%

18623
844
957.98
20425
13325
46%

20693
938
1064.42
22695
14806
39%

20693
938
1064.42
22695
14806
37%

20693
938
1064.42
22695
14806
34%

The IRR for the project is 18.6%, Average ROI is 77% and average DSCR is 2.69.
Particulars
Revenue
Profit Before Tax
Profit After Tax
LT Interest
Interest on Deposits
Depreciation
LT Loan Repayment
Deposit Repayment
Return on Investment (%)
Average ROI
Debt-Service Coverage Ratio
- Debt Service
- Coverage
DSCR
Average DSCR

Year of Operation
3

30000
8908.23
5923.97
1593.19
0.00
434.69
0.00
0.00
80%
77%

33750
7352.18
4889.20
1593.19
0.00
434.69
2569.66
0.00
68%

1593.19
7951.85
4.99
2.69

4162.84
6917.08
1.66

37500
9137.29
6076.30
1194.89
0.00
434.69
2569.66
0.00
79%

37500
9535.59
6341.16
796.59
0.00
434.69
2569.66
0.00
79%

37500
9933.88
6606.03
398.30
0.00
434.69
2569.66
0.00
79%

3764.55
7705.88
2.05

3366.25
7572.45
2.25

2967.95
7439.02
2.51

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24

Leno Bags

24.1

Introduction

Mott MacDonald
NEDFi

Leno bags can be used in bulk packaging of various produce like onion, garlic, potato, peas, citrus
fruits and many other horticultural and agricultural produce. Leno bags are being increasingly used the
world over. In India too, the trend of using Leno bags has started and its use has picked up in UP,
Gujarat, Maharashtra, Karnataka and Tamil Nadu.
24.2

Market Potential

The advantages of using leno bags in place of the conventional jute bags are:
Facilitates excellent aeration of the packed produce which helps storage in the open as well as in cold
storages.
Facilitates easy visual inspection of contents packed.
Resistant to fungal and insect damage.
Resistant to moisture and chemicals.
Does not impart any odour to the packed produce, and is a food grade material.
Reusable and washable, easy to handle and store.
Light in weight, as compared to jute and hence cost effective.
24.3

Plant Capacity

The typical size of the project for manufacture of PP leno bags could have an installed capacity of 144
MT per annum. This would mean that approx 2571 bales of PP leno mesh could be manufactured at
100% capacity utilisation.
24.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

(i)

Manufacturing Process

The raw material, Poly Propylene granules / pellets is fed into an extruder and the resultant tape is
winded by plastic tape winding machine. These adjacent warp tapes are twisted around consecutive
weft tapes to form a spiral pair, effectively locking each weft in place by the leno circular loom. This
mesh is sewed by sewing machine and baled.

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(ii)

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NEDFi

Plant and Machinery

The following are the required plant and machinery:

Extruder
Plastic Tape winding machine
PP Leno Circular Loom
Sewing machine complete set with all fittings
Scissor, Scale, Tape and accessories

(iii)

Plant and Machinery Suppliers

The following is the list of plant and machinery suppliers of the above equipments.

Sl No
1

Name
Exzakta Meccanica

Europack Machines (India) Pvt. Ltd.

24.5

Communication Address
1706/2, GIDC Estate,Ankleshwar 393 002,
Gujarat, INDIA
52, Bindal Industrial Estate, Sakinaka, Andheri
(East), Mumbai 72, India

Raw Material & Utilities Requirement

The major raw material required for the project would be polypropylene. In addition, master batches
are added to add colour. The raw material including PP and master batches would be around 144 MT
at 100% capacity utilisation.
The unit has been assumed to operate at 80% and 90% of its installed capacity in the first & second
year and at 100% capacity from the third year and onwards of its operation.
The utilities required are power and water. Around 50 KW of Power and 600 KLPA of water are
required.
24.6

Land & Built-up Area Requirement

The total land area is 1500 sq metres and the built up area is 1000 sq mt.
24.7

Manpower Requirement

Total manpower required would be 27 Nos of which administrative is 4 and factory staff is 23.
Additional benefits at the rate of 25% have been considered.

Personnel

Nos
1
1
1
1

Works Manager
Accountant-cum-Store Keeper
Administrative Assistant
Clerk
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Skilled Workers
Semi Skilled Workers
Unskilled Workers
Peon/Watchman

12
6
4
1
27

Total
24.8

Project Cost/ Fixed Capital Requirement & Means of Finance

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The total project cost is estimated at Rs 204.46 lakhs as follows.
Sl No
1
2
3
4
5
6
7
Total

Project Cost
Site Development Cost
Building
Plant and Machinery
Miscellaneous Fixed Assets
Preliminary and Pre-Operative Expenses
Margin Money on Working Capital
Contingencies

Rs in Lakhs
3.00
80.00
83.44
7.57
3.82
16.90
9.74
204.46

This project cost may be financed at a debt equity ratio of 3:1 as follows.
Means of Finance
Equity
Debt
Total
24.9

Rs in lakhs
51.12
153.35
204.46

Working Capital Requirement

The working capital requirement is given below.


Sl No

Particulars
1

1
2
3
24.10

Net Working Capital


Available Bank Finance
Margin Money

67.61
50.71
16.90

Years of Operation
2
3
4
76.06
57.04
19.01

84.51
63.38
21.13

84.51
63.38
21.13

5
84.51
63.38
21.13

Operating Expenses

The Annual Operating Expenses estimated at Rs 159.38 lakhs (80% capacity utilization) is given
below.
Sl No
Particulars
Rs in lakhs
1
Annual Land Charges
0.35
2
Raw materials
85.90
3
Utilities
2.90
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4
5
6
7
8
9
10

24.11
Sl No

Wages & Salaries


Overheads
Selling expenses
Packing expenses
Interest on Term Loan
Interest on Bank Finance for Working Capital
Depreciation
Total

13.02
5.36
7.26
7.26
23.00
7.61
6.71
159.38

Profitability Estimates
Particulars

Production/Sales
Installed Capacity
Capacity Utilization
Estimated Production
Gross Sales Revenue
Expenses
Raw Material Consumption
Utilities
Administrative Overheads
Salaries
Sales Expenses
Packing Expenses
Loan Repayment
Lease Rentals
Total
Gross Profit
Financial Expenses
Interest On Term Loan
Interest On Working Capital
Sub Total
Depreciation
Profit Before Tax
Provision For Tax
Profit After Tax
24.12

Mott MacDonald
NEDFi

Yr -1

Yr-2

Year
Yr -3

144
80%
115

144
90%
130

144
100%
144

144
100%
144

144
100%
144

291

327

363

363

363

86
3
5
16
7
7
0
0
125
165

97
3
5
16
8
8
38
0
176
151

107
3
5
16
9
9
38
0
189
175

107
3
5
16
9
9
38
0
189
175

107
3
5
16
9
9
38
0
189
175

23
8
31
7
128
43
85

23
8
31
7
113
38
75

17
9
27
7
141
47
94

12
9
21
7
147
49
98

6
9
15
7
153
51
102

Yr -4

Yr-5

Financial Indicators

The Average Break Even Point for the project is 40%.


Particulars
Sales Realisation
Fixed Costs

Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

291

327

363

363

363

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Salaries
Fixed Selling Expenses
Depreciation (SLM)
Repairs & Maintenance
Utilities (Fixed)
Admin. Overheads Incl Insurance
Loan Repayment
Interest On L.T. Loan
Total Fixed Costs
Variable Cost
Raw Materials
Packing
Interest On Working Capital Loans
Total Variable Costs
Contribution
Breakeven In %
Average Breakeven In %

Mott MacDonald
NEDFi

16
7
7
3
3
5
23
65

16
8
7
3
3
5
38
23
104

16
9
7
3
3
5
38
17
99

16
9
7
3
3
5
38
12
93

16
9
7
3
3
5
38
6
87

86
7
7.54
101
190
34%
40%

97
8
8.48
113
214
49%

107
9
9.43
126
237
42%

107
9
9.43
126
237
39%

107
9
9.43
126
237
37%

The IRR for the project is 19.6%, Average ROI is 78% and average DSCR is 2.75.
Particulars

Year of Operation
2
3
4

1
Revenue
Profit Before Tax
Profit After Tax
LT Interest
Interest on Deposits
Depreciation
LT Loan Repayment
Deposit Repayment
Return on Investment (%)
Average ROI
Debt-Service Coverage Ratio
- Debt Service
- Coverage
DSCR
Average DSCR

291
128.07
85.16
23.00
0.00
6.71
0.00
0.00
77%
78%

327
112.56
74.85
23.00
0.00
6.71
38.34
0.00
70%

363
141.15
93.86
17.25
0.00
6.71
38.34
0.00
81%

363
146.90
97.69
11.50
0.00
6.71
38.34
0.00
81%

363
152.65
101.51
5.75
0.00
6.71
38.34
0.00
81%

23.00
114.88
4.99
2.75

61.34
104.57
1.70

55.59
117.82
2.12

49.84
115.90
2.33

44.09
113.97
2.59

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25

Ropes

25.1

Introduction

Mott MacDonald
NEDFi

Poly Propylene is the easiest material to fibrillate and thus has been used in most of the commercial
products. The major advantages of PP fibrillated ropes are

They are resistant to the corrosive effects of salt water and mildew.

They have high abrasion resistance and are comparatively inert to chemicals.

They have low specific gravity which makes them buoyant.

They have long shelf life without deterioration in strength and do not twist or rotate and hence
remain tangle free.
25.2

Market Potential

PP Fibrillated ropes are used in ports and ship building yards in towing, mooring, dry docking and
other applications. It is used in Electricity Boards for the purpose of tower erection, transformer
hoisting and for material handling.
In defence, PP fibrillated ropes are used for several applications in the armed forces such as towing of
gunny surface targets, rope drags for recovery of vehicles, arrester barriers,pantoon
bridges,tentage,repelling etc. In the transportation industry, PP ropes are used for fastening loads on
trucks and wagons, towing vehicles etc. In steel pipe industry, PP ropes are used in picking and
anodising operation.
PP ropes finds applications in sugar factories, engineering, construction and oil exploration industries
for material handling. Since ropes made by the fibrillating technique are easy to grip and are stronger
than conventional ropes, they find ready acceptance as substitutes for ropes made from natural
material.
25.3

Plant Capacity

The typical size of the project for manufacture of PP Ropes could have an installed capacity of 294
MT per annum.
25.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

(i)

Manufacturing Process

The manufacturing process for fibrillated ropes and twines is a two stage process. At first stage
fibrillated tapes are manufactured and in the second stage the ropes and twines are made.

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PP granules of the suitable grade and additives like UV-stabiliser, etc. are fed into the dosing, mixing
and feeding hopper and blended thoroughly. The charge thus prepared is fed into the extruder where it
is melted, filtered and then pressed through the flat die. The extruded film is then cooled by a chill roll
system. To decrease the concentration of thermo plastic primary film from the die to the chill roll and
to avoid trapped air between film and chill roll air is blown by a fan on to the film through an air knife.
Then cooled primary film is fed over chill roll via the transfer unit into the holding and cutting device,
the film is cut into tapes. Subsequently, the tapes are brought to the required stretching temperature on
a heating plate and are stretched by means of pulling and stabilizing unit. Then the tapes are wound on
bobbins.
The unstretched and stretched edge trims are aspirated after the holding, cutting and stretching, cut
into chip by the edge trim recovery system and conveyed automatically back into the mixing and
metering unit, resulting in nil wastage. The films thus extruded are subjected to a fibrillator unit. Here
the fibrillation is affected by pins and cutters making a series of slots in sheet of film. Then these tapes
are wound on winders for further use.
The degree of fibrillation depends on the frequency of the slots along the film, the length of slots and
the pitch of the slots across the films. The aspirator unit removes the dust and fibres from the
fibrillator and collects broken tapes from the fibrillator.
The packages of fibrillated tapes are kept on the creel and fed to the 2-for-1 twister. The twisted yarn
is then led to the cross laying take up unit where the yarn is laid in criss-cross fashion and wound. The
packages thus cross wound are fed to rope making unit via the stranding section where it is twisted and
fed to the coil winding machine.
(ii)

Plant and Machinery

Major plant and machineries required for the PP Ropes project are:
 Horizontal extruder 90 mm dia L/D ratio = 26:1
 Extrusion head with flat die 1000 mm
 Stretching unit
 Fibrillation unit
 Stabilising and holding unit
 Edge trim recover system
 Winding system
 Two for one twister
 Take up unit
 Control cabinets
 Stranding unit
 Rope making unit
 Mixing and dosing unit
 Chilling plant and cooling tower
 Air compressor
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 Coil winding unit


25.5

Raw Material & Utilities Requirement

The major raw material required is box strapping grade poly propylene. Certain additives and
plasticisers have to be added to manufacture ropes and twines.
The raw material required would be around 294 MT at 100% capacity utilisation. The unit has been
assumed to operate at 80% and 90% of its installed capacity in the first and second year and at 100%
capacity from the third year and onwards of its operation.
The utilities required are power and water. Around 110 KW of Power and 450 KLPA of water are
required.
25.6

Land & Built-up Area Requirement

The land area required would be approx 750 sq.m with a build up area of 500 sq.mtr.
25.7

Manpower Requirement

Total manpower required would be 16 Nos of which administrative is 4 and factory staff is 12.

Personnel

Nos
1
1
1
1
6
3
2
1
16

Works Manager
Accountant-cum-Store Keeper
Administrative Assistant
Clerk
Skilled Workers
Semi Skilled Workers
Unskilled Workers
Peon/Watchman
Total
25.8

Project Cost/ Fixed Capital Requirement & Means of Finance

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The total project cost of Rs 144.34 Lakhs is as follows.
Sl No
1
2
3
4
5

Project Cost
Site Development Cost
Building
Plant and Machinery
Miscellaneous Fixed Assets
Preliminary and Pre-Operative Expenses

Rs in Lakhs
1.50
30.00
75.00
8.12
2.70

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6
7

Margin Money on Working Capital


Contingencies
Total

Mott MacDonald
NEDFi

20.15
6.87
144.34

The project cost may be financed with a debt: equity ratio of 3: 1 as follows.

Means of Finance

Rs in lakhs

Equity
Debt
Total

25.9

36.08
108.25
144.34

Working Capital Requirement

The working capital requirement is given below.


Sl No

Particulars

Years of Operation
2
3
4

1
1
2
3

25.10

Net Working Capital


Available Bank Finance
Margin Money

80.58
60.44
20.15

90.66
67.99
22.66

100.73
75.55
25.18

100.73
75.55
25.18

5
100.73
75.55
25.18

Operating Expenses

The annual operating expenses estimated at Rs 236.27 lakhs (80% capacity utilization) is given below:
Sl No
Particulars
Rs in lakhs
1
Annual Land Charges
0.17
2
Raw materials
167.57
3
Utilities
6.22
4
Wages & Salaries
10.58
5
Administrative Overheads
4.80
6
Selling Expenses
8.06
7
Packing Expenses
8.06
8
Interest on term loan
16.24
9
Interest on Bank Finance for Working Capital
9.07
10
Depreciation
5.51
Total
236.27
25.11
Sl No

Profitability Estimates
Particulars

Production/Sales
Installed Capacity
Capacity Utilization

Yr -1

Yr-2

Year
Yr -3

288
80%

288
90%

288
100%

Yr -4

Yr-5

288
100%

288
100%

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Estimated Production
Gross Sales Revenue

Mott MacDonald
NEDFi

230

259

288

288

288

323

363

403

403

403

168
6
5
8
8
8
0
0.17
203
119

189
6
5
8
9
9
22
0.17
248
115

209
6
5
8
10
10
22
0.17
271
132

209
6
5
8
10
10
22
0.17
271
132

209
6
5
8
10
10
22
0.17
271
132

16
9
25
6
88
30
59

16
10
26
6
83
28
55

13
11
24
6
102
34
68

10
11
21
6
106
35
70

6
11
18
6
109
36
72

Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

323

363

403

403

403

8
8
6
2
6
5
16
52

8
9
6
2
6
5
16
22
74

8
10
6
2
6
5
13
22
72

8
10
6
2
6
5
10
22
69

8
10
6
2
6
5
6
22
65

168
8
9.07
185
138

189
9
10.20
208
155

209
10
11.33
231
172

209
10
11.33
231
172

209
10
11.33
231
172

Expenses
Raw Material Consumption
Utilities
Administrative Overheads
Salaries
Sales Expenses
Packing Expenses
Loan Repayment
Lease Rentals
Total
Gross Profit
Financial Expenses
Interest On Term Loan
Interest On Working Capital
Sub Total
Depreciation
Profit Before Tax
Provision For Tax
Profit After Tax
25.12

Financial Indicators

The Average Break Even Point for the project is 41%.


Particulars
Sales Realisation
Fixed Costs
Salaries
Fixed Selling Expenses
Depreciation (SLM)
Repairs & Maintenance
Utilities (Fixed)
Admin. Overheads Incl Insurance
Interest On L.T. Loan
Loan Repayment
Total Fixed Costs
Variable Cost
Raw Materials
Packing
Interest On Working Capital Loans
Total Variable Costs
Contribution

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Breakeven In %
Average Breakeven In %

37%
41%

48%

Mott MacDonald
NEDFi

42%

40%

38%

The IRR for the project is 25.2%, Average ROI is 80% and average DSCR is 3.04.
Particulars
Revenue
Profit Before Tax
Profit After Tax
LT Interest
Interest on Deposits
Depreciation
LT Loan Repayment
Deposit Repayment
Return on Investment (%)
Average ROI
Debt-Service Coverage Ratio
- Debt Service
- Coverage
DSCR
Average DSCR

Year of Operation
3

323
88
59
16
0

363
83
55
16
0

403
102
68
13
0

403
106
70
10
0

403
109
72
6
0

6
0
0
76%
80%

6
22
0
73%

6
22
0
84%

6
22
0
84%

6
22
0
84%

16
81
4.96
3.04

38
77
2.03

35
87
2.50

31
86
2.72

28
84
3.00

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26

PP Disposable Plastic Cups/ Glasses

26.1

Introduction

Mott MacDonald
NEDFi

Disposable cups are now fast replacing conventional cups. 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. The
disposable cups are gaining popularity due to attractive look, low weight for container, ease of
transportation and low impermeability. Organizations like Railways, Airlines are using disposable
cups for serving coffee, tea etc. now-a-days.
26.2

Market Potential

With the changing lifestyles and attitudes, there has been an increased market for the thermoformed
products. The following are the major sectors in which these find application.
Food Industry
Food Industry is one of the largest users of Thermoformed packaging. Their main application is for
processed food and take away serving packaging.
Pharmaceutical/Medical Industry
Products like Ampoules, Diagnostic Kits etc., are packed in thermoformed packaging.
Electronics Industry
The miniature components can be individually form packed and protected against damage due to
handling.
Horticulture Industry
There are many applications to pack fruits and vegetables for bulk and consumer pack. The
thermoformed articles are used for green house as seed trays and flower pots etc.
Personal Care Products. & Cosmetics Industry
Changing vogues imply shorter life span of products. Costly tooling is needed for injection moulded
container/ packaging. Thermoforming packs are cheaper, faster to make and the process has higher
output rates making quick changes in design economically feasible.
Construction Industry
Sheets and rolls of appropriate material can be formed and used as an excellent barrier against water
seepage in tunnels etc. Many other products like bathroom accessories, domes, panelling, ceiling etc
can be made.
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Automobile Industry
Large sized thick walled thermoformed products like door liners, dash boards, front grills are widely
used in the automobile sector.
Thermoforming differs from injection molding, blow molding, rotational molding, and other forms of
processing plastics. Thin-gauge thermoforming is primarily the manufacture of disposable cups,
containers, lids, trays, blisters, clamshells, and other products for the food, medical, and general retail
industries. Thick-gauge thermoforming includes parts as diverse as vehicle door and dash panels,
refrigerator liners, utility vehicle beds, and plastic pallets.
The following are the advantages of thermoformed products in packing
Hygienic.
Protection to the product packed.
Precise and convenient placement of the product due to contoured forming.
Reduced cost of packing.
Light weight packing.
Easy visual inspection without opening the whole package.
Tamper proof packaging.
Microwavable moisture Resistant packaging.
Inert to many chemicals.
Can be formed as transparent, Printed, Opaque etc.
Development costs are comparatively lower and high volumes can be produced within a very short
time.
Some of the reasons for thermoformed PP packaging's immense popularity are
Easily recyclability.
Choice of Rigidity / flexibility in packing.
Storage at sub-zero temperatures.
Good moisture barrier properties.
These are suitable for micro-wave ovens.
Excellent contact clarity (Clarified PP).
Economical.
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26.3

Mott MacDonald
NEDFi

Plant Capacity

The proposed production is estimated to be of two types, tea/coffee cups of 65 -80 ml and water/juice
glasses of 180 ml. The following table details the production plan.
Sl No
1
2

Particulars
65-80 ml of tea /
coffee cups
180 ml of water /
juice glasses

Per Hour
Production
70,000

Estimated
Days of Prodn
150

Working
hours / day
8 hours

70,000

150

8 hours

Total Annual
Production
84000000
84000000
168,000,000

Total

The unit has been assumed to operate at 80%, 90% and 100% of its installed capacity in the first,
second and third year and onwards of its operation with 8 working hours/day i.e.1 shift and 300
working days in a year.

26.4

Process, Plant & Machinery (Details & List of Machinery Suppliers)

(i)

Manufacturing Process

In the most common method of high-volume, continuous thermoforming of thin-gauge products,


plastic sheet is fed from a roll or from an extruder into a set of indexing chains that incorporate pins,
or spikes, that pierce the sheet and transport it through an oven for heating to forming temperature.
The heated sheet then indexes into a form station where a mating mold and pressure-box close on the
sheet, with vacuum then applied to remove trapped air and to pull the material into or onto the mold
along with pressurized air to form the plastic to the detailed shape of the mold. (Plug-assists are
typically used in addition to vacuum in the case of taller, deeper-draw formed parts in order to provide
the needed material distribution and thicknesses in the finished parts.)
After a short form cycle, a burst of reverse air pressure is actuated from the vacuum side of the mold
as the form tooling opens, commonly referred to as air-eject, to break the vacuum and assist the
formed parts off of, or out of, the mold. A stripper plate may also be utilized on the mold as it opens
for ejection of more detailed parts or those with negative-draft, undercut areas. The sheet containing
the formed parts then indexes into a trim station on the same machine, where a die cuts the parts from
the remaining sheet web, or indexes into a separate trim press where the formed parts are trimmed.
The sheet web remaining after the formed parts are trimmed is typically wound onto a take-up reel or
fed into an inline granulator for recycling.
Most thermoforming companies recycle their scrap and waste plastic, either by compressing in a
baling machine or by feeding into a granulator (grinder) and producing ground flake, for sale to
reprocessing companies or re-use in their own facility. Frequently, scrap and waste plastic from the
thermoforming process is converted back into extruded sheet for forming again.
(ii)

Plant and Machinery

The major equipment required by the unit for manufacturing plastic disposable cups are as follows:
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NEDFi

Automatic thermoforming machine


Die Punch for cups
Other accessories (Air compressor)
Sheet extruder and scrap grinder
Testing equipment
(iii)

Plant and Machinery Suppliers

The following are the plant and machinery suppliers for the project.
Sl No
1
2
3

26.5

Name
M/s Klockner Windsor India Ltd.

Communication Address
E-6 UZ Road, Thane Industrial Estate,
Thane 400 604
M/s Wonderpack Industries P.Ltd.
72, Ist floor, Shivalaya Mansion,
Hamington Road, Mumbai- 400 008
M/s Isimat India Screen Printing 29, Apurva Industrial Estate,
Machinery Pvt. Ltd.
Makvana Road, Andheri Kurla Road,
Andheri (East),Mumbai 400 059
M/s Solex Machines
C, 1/510, GIDC, Gundlav,
Distt. Valsad, Gujarat-396 035
Raw Material & Utilities Requirement

The major raw material required for the project would be polypropylene which is as follows.
Raw Material Requirement
Milli litre
65-80 ml tea/coffee cups
80
180 -200 ml water / juice cups
200
Total Raw Material Reqd including 3% wastage

Wt in gms
1.032
2.58

Total in MT
74.30
108.36
188.14

The unit has been assumed to operate at 80% and 90% of its installed capacity in the first and second
year and at 100% capacity from third year and onwards of its operation.
The utilities required are power and water. Around 220 KW of Power and 450 KLPA of water are
required.
26.6

Land & Built-up Area Requirement

The total land area is 500 sq metres and the built up area is 300 sq mt.
26.7

Manpower Requirement

Total manpower required would be 13 Nos of which administrative is 4 and factory staff is 9.
Personnel
Nos
Works Manager
1
Accountant-cum-Store Keeper
1
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NEDFi

Administrative Assistant
Clerk
Skilled Workers
Semi Skilled Workers
Peon/Watchman
Total
26.8

1
1
5
3
1
13

Project Cost/ Fixed Capital Requirement & Means of Finance

Land has not been considered as a part of the project cost because it has been considered to be taken
on lease (as applicable in Assam). One time Land Development Charges have been taken as part of the
Project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered
as part of operating cost. The project cost of Rs 199.87 lakhs is as follows.
Sl No
1
2
3
4
5
6
7

Particulars

Rs in Lakhs
1.00
24.00
135.21
9.15
2.00
19.00
9.52
199.87

Site Development Cost


Building
Plant and Machinery
Miscellaneous Fixed Assets
Preliminary and Pre-Operative Expenses
Margin Money on Working Capital
Contingencies
Total

This project cost may be financed at a debt equity ratio of 3:1 as follows.
Means of Finance
Equity
Debt
Total
26.9

Rs in lakhs
49.97
149.90
199.87

Working Capital Requirement

The working capital requirement is given below:


Sl No

Particulars
1

1
2
3
26.10

Net Working Capital


Available Bank Finance
Margin Money

76.00
57.00
19.00

Years of Operation
2
3
4
85.50
64.12
21.37

95.00
71.25
23.75

95.00
71.25
23.75

5
95.00
71.25
23.75

Operating Expenses

The annual operating expenses estimated at Rs 177.02 lakhs (80% capacity utilization) is given below:
Sl No
Particulars
Rs in Lakhs
1
Annual Land Charges
0.12
2
Raw materials
107.73
3
Utilities
11.13
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4
5
6
7
8
9
10
Total
26.11

Wages & Salaries


Overheads
Selling expenses
Packing expenses
Interest on term loan
Interest on Bank Finance for Working Capital
Depreciation

9.00
3.53
0.67
8.06
22.49
8.55
5.74
177.02

Profitability Estimates

Sl No

Particulars

Production/Sales
Installed Capacity(in lakh nos)
Capacity Utilization
Estimated Production (in lakh
nos)
Gross Sales Revenue
Expenses
Raw Material Consumption
Utilities
Administrative Overheads
Salaries
Sales Expenses
Packing Expenses
Loan Repayment
Lease Rentals
Total
Gross Profit
Financial Expenses
Interest On Term Loan
Interest On Working Capital
Sub Total
Depreciation
Profit Before Tax
Provision For Tax
Profit After Tax
26.12

Mott MacDonald
NEDFi

Yr -1

Yr-2

Year
Yr -3

1680
80%
1344

1680
90%
1512

1680
100%
1680

1680
100%
1680

1680
100%
1680

323

363

403

403

403

108
11
4
7
8
8
0
0.12
146
177

121
11
4
7
9
9
37
0.12
199
164

135
11
4
7
10
10
37
0.12
214
189

135
11
4
7
10
10
37
0.12
214
189

135
11
4
7
10
10
37
0.12
214
189

22
9
31
5.7
140
46
94

22
10
32
5.7
126
42
85

17
11
28
5.7
156
51
104

11
11
22
5.7
161
53
108

6
11
16
5.7
167
55
112

Yr -1

Yr-2

Yr -3

Yr -4

Yr-5

323

363

403

403

403

Yr -4

Yr-5

Financial Indicators

The Average Break Even Point for the project is 36%.


Sales Realisation

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Fixed Costs
Salaries
Fixed Selling Expenses
Depreciation (SLM)
Repairs & Maintenance
Utilities (Fixed)
Admin. Overheads Incl Insurance
Interest On L.T. Loan
Loan Repayment
Total Fixed Costs
Variable Cost
Raw Materials
Packing
Interest On Working Capital Loans
Total Variable Costs
Contribution
Breakeven In %
Average Breakeven In %

Mott MacDonald
NEDFi

7
8
6
2
11
4
22
60

7
9
6
2
11
4
22
37
99

7
10
6
2
11
4
17
37
94

7
10
6
2
11
4
11
37
89

7
10
6
2
11
4
6
37
83

108
8
9
124
198
30%
36%

121
9
10
140
223
44%

135
10
11
155
248
38%

135
10
11
155
248
36%

135
10
11
155
248
34%

The IRR for the project is 27.4%, Average ROI is 86% and average DSCR is 3.01.
Particulars
Revenue
Profit Before Tax
Profit After Tax
LT Interest
Depreciation
LT Loan Repayment
Return on Investment (%)
Average ROI
Debt-Service Coverage Ratio
- Debt Service
- Coverage
DSCR
Average DSCR

Year of Operation
3
4

323
139.95
93.77
22.49
5.74
0.00
84%
86%

363
126.24
84.58
22.49
5.74
37.48
77%

403
155.64
104.28
16.86
5.74
37.48
89%

403
161.26
108.04
11.24
5.74
37.48
89%

403
166.88
111.81
5.62
5.74
37.48
89%

22.49
121.99
5.43
3.01

59.96
112.81
1.88

54.34
126.88
2.33

48.72
125.03
2.57

43.10
123.17
2.86

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