PAPER MADE CARRY BAG

Introduction:
Paper carry bags are common packaging materials being used by the textiles and cloth
merchants, dry cleaners, bakers, grocers, stationers, sweet sellers etc.
Market Potential:
Establishment of shopping complexes and consumer stores in the rural, semi-urban and urban
areas, the demand for paper bags has increased. Due to ban on polythene carry bags the
demand has been growing very fast.
Production Target:
i)
Quantity : 15,00,000 Nos.
ii)
Value :
Rs 45.00 lakhs
Raw materials:
Sl.No. Particulars
i)
ii)
iii)
iv)
v)

Paper in roll
Gum
Printing Ink
Eyelet
Lace

:
:
:
:
:

Qty.

Rate

1,00,000 Kg.
300 Kg.
100 Kg
750 Pkt
75 kg

@ Rs 30/kg
@ Rs 25/kg
@ Rs 200/kg
@ Rs 50/Pkt.
@ Rs 100/kg
Total

Process:
The major process steps are:
i)
ii)
iii)
iv)
v)
vi)

Cutting paper into proper size by cutting machine.

Printing the paper as per need.
Making bags by automatic bag making machine.
by folding, pasting, & shearing.
Punching
Eyelet fitting
Lace fitting.

Machinery:
The major machineries & equipment required are
i)
ii)
iii)
iv)

Automatic paper bag making machine.

Creezing machine.
Cutting machine.
Misc. tools and equipments.

Infrastructure:
The major infrastructure required are
Covered Area
:
Power
:

400 sq.mt.
10 HP

Location:
The suggested locations are
Assam
Arunachal Pradesh
Meghalaya
Nagaland
Tripura
Manipur
Sikkim

Guwahati, Jorhat, Tinsuki

Itanagar,
Shillong,
Dimapur,
Agartala,
Imphal,
Gangtok & other Dist. H. Q.

:
:
:
:
:
:
:

111

Value (Rs akhs)

30.00
0.08
0.20
0.38
0.07
30.73

Total Capital Requirement:

The total capital requirement including fixed capital and working capital is estimated at Rs 14.73
lakhs as follows. Of this, the project cost comprising fixed capital and margin money on working
capital is Rs 10.88 lakhs.
A.

Fixed Capital:
Land building
Plant & Machinery
Miscellaneous fixed assets
Preliminary and pre-operative expenses

B.

Working Capital:
Raw materials
Finished goods
Working expenses
Receivables

(Rs in lakh)
Rented
8.00
0.50
_ 0.30
Total (A)
8.80
======
15 days
15 days
1 month
15 days
Total (B)
Total (A)+(B)

1.54
1.82
0.32
2.25
5.93
====
14.73

Note: Working capital may be financed as:

Bank Finance (65%)
Margin Money (35%)

..
..

Rs 3,85 Lakhs
Rs 2.08 Lakhs
Rs 5.93 lakhs
=============

..
..

Rs 8.80 Lakhs
Rs 2.08 Lakhs
Rs. 10.88 Lakhs
=============

Capital Cost of Project:

1.
2.

Fixed Cost
Margin money for W.C.

Means of Finance:
Promoters contribution (35%)
Term Loan (65%)

Rs 3.81 lakhs
Rs 7.07 lakhs
Rs 10.88 lakhs
============

Operating Expenses:
The annual operating expenses are estimated at Rs. 40.75 lakhs as given below:
(Rs. lakhs)
1.
Raw materials:
30.73
2.
Packaging materials
0.35
3.
Utilities
0.85
4.
Wages & Salaries
3.00
5.
Rent, Insurance
0.75
6.
Other overheads
0.50
7.
Selling expenses @ 5% on annual sales
2.25
8.
Interest on term loan@ 13.50%
0.95
9.
Interest on Bank Finance for
Working Capital @12.75%
0.49
10.
Depreciation @10%
on m/c
0.88
Grand Total
40.75
=====
Sales Realization:
Sl.No.
Particulars
Qty.
Rate (Rs)
Value (Rs Lakhs)
1..
Paper Carry Bags
15,00,000
3/45.00
TOTAL
45.00

112

Profitability :
Based on the sales realization of Rs 45.00 lakhs and the operating expenses of Rs. 40.75
lakhs the profit would be Rs 4.25 lakhs per year. This works out to a return on investment of
29%. The plant will break even at 47% of the rated capacity.
Highlight:
The major highlights of the project are as follows:
Total capital requirement
Promoters contribution
Annual sales realization (70% cap.)
Annual operating expenses (70% cap.)
Annual profit (pre-tax)
Pre-tax Return on Sales
Break Even Point
No.of persons employed

1. Suppliers of Machinery
1.

2.

3.

4.

5.

M/s Industrial Paper Machine (P) Ltd.,

A-32, Phase-I, Naraina Indl. Area,
New Delhi
M/s. Sandhu Mechanical Engg. Works,
Industrial Area-A, Plot No. 32,
Ludhiana
M/s Rupal Industries (Regd.),
728, Industrial Area-B,
Ludhiana
M/s. Indo Europe Trading Co.,
1980, Chandni Chowk,
Delhi- 6
M/s Kohli Industries,
29, Sona Udyog Indl. Estate,
Parsi Panchayat Road,
Andheri (E), Mumbair

:
:
:
:
:
:
:
:

Rs 14.73 Lakhs
Rs
3.81
Rs 45.00
Rs 40.75
Rs
4.25
9%
47%
6 Nos.

2. Suppliers of Raw Materials.

1.

2.

3.

4.

5.

6.

113

M/s Punalur Paper Mills,

Punalur,
Kerala
M/s Star Paper Mills Ltd.,
Saharanpur
UP
M/s Rohtas Industries Ltd.,
Dalmianagar
Bihar
M/s Paper & Pulp Conversion Ltd.
376, Shukrawar Peth,
Bihar.
M/s Ballarpur Paper Mills Ltd.
Ballarpur,
Dist: Chanda,
Maharastra.
M/s Sirpur Paper Mills Ltd.
Sirpur, Kaghaznagar
Andhra Prades.