Business Plan

Rajnish [year- 2008-2010]

Chaubey

QUASAR PLASTICS
IBMR Bangalore

Quality at the BEST

1 | Quasar Plastics
2 | Quasar Plastics
“This is business plan is submitted to the IBMR Bangalore as a part of
curriculum.”

Submitted by:
Rajnish kumar Chaubey
PGDM (2008-2010)

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TABLE OF CONTENT

EXECUTIVE
SUMMARY………………………………………………………………………………………
………………….4

COMPANY
OVERVIEW………………………………………………………………………………………
…………………..5

MISSION………………….
………………………………………………………………………………………………………
………….5

MARKET AND
PRODUCT…………………………………………………………………………………………
…………………..6

OBJECTIVE………………………………………………………………………………………
…………………………………………..6

KEY TO SUCCESS..
………………………………………………………………………………………………………
………………..6

PRODUCT AND SERVICE

DESCRIPTION………………………………………………………………………………….
.7

MARKET COMPARISON………………………….
……………………………………………………………………………………7

POSSIBLE OBSTACLES…….………………………………….
………………………………………………………………………..7

INDUSTRY AND MARKET PLACE ANALYSIS………….

………………………………………………………………….9

INDUSTRY ANALYSIS……………………………………………………..
…………………………………………………………….6

MARKETPLACE ANALYSIS…………………………………………………………………….
……………………………………..6

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CUSTOMER
ANALYSIS…………………………………………………………………………………………
………………….…11

COMPETITOR
ANALYSIS…………………………………………………………………………………………
…………………12

MARKETING STRATEGY………….
……………………………………………………………………………………………12

PRODUCT SERVICE STRATEGY..

…………………………………………………………………………….………………….13

PRICING STRATEGY…………………………………………..
………………………………………………………………….…13

DISTRIBUTION
STRATEGY…………………………………………………………………………………………
………………13

ADVERTISEMENT AND PROMOTION

STRATEGY……………………………………………………………………….13

SALES
STRATEGY…………………………………………………………………………………………
……………………………13

SALES
FORECAST………………………………………………………………………………………
………………………………13

DEVELOPMENT
………………………………………………………………………………………………………
………….14

DEVELOPMENT STRATEGY….
…………………………………………………………………………………………………….1
4

MANAGEMENT…….
………………………………………………………………………………………………………
…….15

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OPERATIONS….
………………………………………………………………………………………………………
…………..16

SCOPE OF
OPERATIONS……………………………………………………………………………………
………………..…….20

SUPPLY CHAIN………………..
………………………………………………………………………………………………………
…21

PROCESS FLOWCHART………………………….
………………………………………………………………………………….22

GANTT
CHART……………………………………………………………………………………………
…………………………….23

FACILITY
LAYOUT……………………………………………………………………………………………
………………………..24

FINANCIAL STATEMENT………………………………….
…………………………………………………………………..25

STARTUP
EXPENCES…………………………………………………………………………………………
………………………25

INCOME
STATEMENT………………………………………………………………………………………
……………………….26

BALANCE SHEET……………………….
…………………………………………………………………………………………….…27

BREAK EVEN
POINT………………………………………………………………………………………………
………………….28

APPENDIX………………………………………………………………………………………
………………………………….29

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Bibliography
………………………………………………………………………………………………………
………………33

Executive summary
Plastic is the basic need of our day to day life. During recent years the plastic
industry has grown with a substantial growth rate. This growth is driven by three
sectors viz packaging, infrastructure and agriculture. There are the various
verities of plastics out of which PVC (Polyvinyl chloride) and PET (Polyethylene
terephthylene) plastics have their considerable contribution. PET plastics are
generally used in the manufacturing of beverage bottles for the packaging and
PVC plastic is used in the production of household plastic materials. The growing
utilization of plastics in industrial and consumer applications and surrounding
solid waste recycling, has led to an increased demand for recycled plastic resins
and products.

We the Quasar plastics provide a wide range of plastic solutions for household
and raw material for packaging of various companies. As a part of our ongoing
efforts to exploit this opportunity we will recycle the plastics and then produce
kitchen ware items and other related plastic material. We will also sell the
recycled plastics to the companies in the plastic business. We will have a

7 | Quasar Plastics
recycling plant along with the production unit. The raw material will be procured
from the waste collectors. The raw material will be post consumed beverage
bottles and other soft plastic materials

Our main focus is our industrial customer whom we will sell PET bottles and PET
flakes. It will contribute more than 60% of our sales. We will also focus on the
household plastic business which is the part of our portfolio. The initial set up
cost will be Rs 34, 40,000.

Quasar plastics will be a solution proprietorship business run by the promoter

Rajnish Kumar Chaubey who is a MBA graduate with finance and marketing as
specialization.

Since plastic material does not carry any brand name so it will give us an addition
benefit in long term to establish our brand name. To exploit the market we will
use penetration pricing as our marketing strategy and utilize our stringent
distribution network and strong industrial relationship.

As a future plan in coming years we will increase the variety of plastics like LDPE
(Low density polyethylene) and HDPE (High density polyethylene). By doing this
we will be able to produce plastic carry bags and raw material for production for
plastic chairs and tables and other fiber based products.

COMPANY OVERVIEW
Quasar Plastics provide a wide range of plastic solutions for households and raw
material for packaging to the various companies. Allahabad is the place where
the facility will be established and other operation will commence.

We will collect the plastic garbage like consumer beverage bottles, plastic bags
from various garbage stores and then our recycle unit will process it which
eventually be used for the production of finished goods.

The plastic garbage we are getting as raw material has two components one is
PVC (Polyvinyl chloride) and other is PET (Polyethylene terephthylene ). Firstly
the whole garbage is melted and then PVC and PET are separated from each
other by froth flotation technique.

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We will create a plant (actual facilities to be shared with the recycling unit) to
manufacture extruded plastic flakes (purified plastic). The extruded plastic is then
molded in the various products.

We will produce two types of replay plastics

• PVC( Polyvinyl chloride)

• PET( Polyethylene terephthylene )

Mission Statement
Quasar Plastics

• Strive to provide the excellent plastic solution to the customers at

competitive prices.
• Continually expands our range of products.
• Is poised to service both large and small customers.

Markets and Products

The plastic products usually do not carry a brand name so intruding in the
business like plastic will not be too hard with low price strategy. The population of
Allahabad and the cities around it like Varanasi, Gorakhpur, Johnpur is around
3Cr. and this area is basically comprises of low to middle income group families
so they focus on plastic products rather than fiber since it is a cheaper. Hence it
is huge market to exploit.

From Allahabad city 500 tons of solid waste is produced from that 15tons of
plastic bags and around 7 tons of plastic bottles is generated per day. So the
supply of raw material will be continuous.

Apart from this we will sell raw material for packaging to the various small
companies in this area. Around 30 small and medium scale companies are
working in this region. So a large amount of industrial customer is also available.

There are two folds of products that we are providing one is industrial and other
is household.
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Objectives
• Develop a business that survives on its own cash.
• Create a company which exceeds customer satisfaction level.
• Expand the service to whole UP in first five years and then to Delhi.
• Extending the services to electronic component manufacturing companies
for production of capacitors printed circuit boards etc.
Key to success:
The main keys to the success of the Company are:
• Secure Supply- Contract for supply of post-consumer bottles and post-
industrial manufacturing waste for PET raw material feed stock.
• Satisfy our customer so that we can retain them
• Maintain low overhead and operating costs
• Provide better prices than all our competitors

Product and services

We will provide a wide range of plastic products for households and raw material
for packaging.

The recycled plastic is processed to Polyethylene Terephthalate (PET). PET is a

thermoplastic polymer viscous of polyester family. The biggest property of this
compound is it transparent. This is the reason why it is used for packaging. Apart
from this PET have good strength, ductility, stiffness and hardness. After the
recycling process completed an extruded plastic is generated. Plastics extrusion
is a high volume manufacturing process in which raw plastic material is melted
and formed into a continuous profile.

The products we are producing are

• Cleaned and recycled plastic flakes of PET and bottles, recovered from
post-consumer beverage bottles. (this PET will work as raw material for
packaging to various firms, not for the end user)
• Household finished plastic goods. We are manufacturing plastic tubes of
various diameter, plastic kitchen ware. ( for the end user)

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PET flake will be sold to thermo formers (those who mold plastic sheets into
usable products) primarily to be used to produce high-visibility packaging. And
also to the beverage companies for packaging.

Recycled plastic is widely used in mainstream construction products such as

damp proof membrane, drainage pipes, ducting and flooring. Bins, street signs
and planters are frequently made from plastic. They are cost competitive and
resistant to damage. Local authorities and schools are able to demonstrate
recycling in action by specifying recycled products
High strength PET is used in the clothing, furnishings, tyre cord and technical
textiles
Apart from PET the household plastic will be directly sold to the end customers.
In day to day life plastic items like water bottles, shop case scrubber etc is
frequently used. So there is a big demand of these in local market.

Market comparison
While quality and delivery are important factors to our potential clients, price is
most often the determining factor in a buying decision. Good-quality packaging
products manufactured from recycled (less expensive) resins, as close as
practical to the end customer's operations, will be most competitive and achieve
a significant market share. These factors have helped to determine the business
parameters of Replay Plastics.
Possible obstacle
The product is completed and ready for the market launch. The possible
obstacles are
Unavailable or scarce raw material stock for production
• Replay is confident that it has secured good availability of low cost post-
consumer PET bottles (feed stock) derived from post-consumer beverage
bottles. It may be possible that we would not get desired raw material.
Company may not meet environmental standards
This environmentally-favorable venture provides for the development of
technically feasible and economically viable solutions to PET plastic
beverage bottle recycling, as well as environmentally aware in-house re-
use practices which filter and return nearly all of the process water to the
production lines

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 Industry and marketplace analysis
Industry analysis
Plastic recycling is an industry in itself in India. According to the Crisil research
7360 companies are working in this industry with a turnover of Rs 9200 Crore
provides employment to 3.5 million people. In India per capita plastic
consumption in lowest in the world. The per capita consumption is just one fifth of
world average which is 5kg. the domestic demand of plastic has grown by 9%
and reached to 4.5MMT in year 2005.The GDP has grown during this period at
6.3% and plastic industry 1.3 times of GDP. According to the Crisil report the
demand of plastic by 2012 will be around 12MMT. The plastic consumption in
India is booming. Demand for commodity plastics is growing at the rate of 15%
per year. .India holds immense potential for the use of plastic in the infrastructure
and agriculture. In case of packaging industry we are using more plastic than the
developed countries. The growth is driven in three major sectors – infrastructure
which is 13%% of the total, packaging is 15% of the total and 10% for plastic
consumer durables. It is projected that the plastic waste generation will reach the
will reach the level of 1.6 million tons annually.
India produces 5600 tons of plastic waste per day.
Region wise and polymer wise turnover of recycling industry in Rs.Crore
Region PVC PET
West 156 383
East 75 86
North 338 158
South 111 139
Total 680 766
Each region is specialized in one type of plastic viz south: PET; north: PVC;
The current plastic recycling rate is estimated as 60% by Plastic India
Foundation. One estimate is that about 20,000 microenterprises are engaged in
reprocessing and recovery of plastic waste in addition to 180,000 of various
sorting and washing units, 60% of which are unregistered .Delhi alone has
estimated 53,400 units and Delhi and Bombay together process over 50% of
India's waste plastics.
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STRUCTURE OF THE PLASTICS INDUSTRY
The following pattern is likely to be general but there will be some variation from
country to country.

Raw Material Producers

These are chemical and petroleum companies who produce "virgin" plastic
(sometimes called resin or polymer) in huge quantities. The main influence they
have on the recycler is to fix prices and availability of virgin materials. Virgin
material is delivered in powder or pellet form, in plastic or paper sacks of around
20 kilos weight, in large cardboard drums that hold many times that quantity or
even by road tanker.

Compounders
These specialist companies, usually small, stock various polymers and provide
the manufacturers of plastic goods with technical advice and the most suitable
materials or mixtures for each individual need. The compounder is often the best
market for the recycler because he possesses superior technical knowledge and
has a large volume throughput of virgin material, in which small percentages of
reclaim will reduce cost without seriously affecting the quality required by the
molder.

Stockists
These warehouses stock polymers and compounds but neither manufacture
themselves, nor provide a compounding service. They may be agents or
subsidiaries of the producer companies or departments of companies concerned
with the supply of other materials such as chemical, rubber or paper. They may
be willing to stock reclaim alongside virgin materials, especially if these are in
short supply.

Specialist Manufacturers or Molders

These buy their raw materials from compounders. If they do their own
compounding, or if the material is used as produced and does not need
compounding, they may buy direct from stockists or producers. They are
specialists in plastics and do not perform other types of manufacturing. They may
be an attractive market to the recycler because they operate at high volume, but
rarely have as much flexibility to vary product quality as molders who know,
accurately, the final market for the product.

Other Manufacturers
Many companies are not plastics specialists but employ molding operations in
the manufacture of some other product. For example shoe and boot makers use
plastics extensively and may carry out the various plastics molding operations in
the same production sequence as the work in leather, canvas, rubber etc. Many

13 | Q u a s a r P l a s t i c s
manufacturers use plastic packaging machinery at the end of a production
operation.

Fabricators
These firms cut and join sheet, rod or extrusion to manufacture a variety of
products. They have no opportunity to use reclaim. Machinery and Tool Makers
One other sector of the plastics industry justifies mention although not customers
for reclaim. The makers and suppliers of plastics manufacturing machinery, tools,
moulds and dies are well informed about who does what, who makes what and
who uses what within the local plastics industry. They may advise who is likely to
buy material.
Marketplace analysis
Various overseas players wish to explore the Indian market and invest in
opportunities thrown open by the country, projected to be world number 3 in
plastics consumption by 2010.As shown above the north region of India is
specialized in recycling of PVC. So there is a great scope of PET recycling.
Apart from this the other

• A huge market with full of opportunity.

• Absence of standard product and service

• Well connected with other rural areas

• Having good transportation facility

Customer analysis
Since we are new player in the market so we need to make some stringent
strategies to penetrate market and grab customers. The customers of the plastic
industry are scattered due to lack well known brand names. So our first priority
will be to accumulate the defused customers.
The direct customers are the customers whom we are selling our product
regularly. So for us households whom we are selling plastic goods and
companies who are getting raw materials for packaging are direct customers
(PET bottles). So only in Allahabad around 20,000 families are our direct
prospective customers and in terms of business to business market around 20
small and medium scale companies are our direct customers
Apart from them there are few small companies which are giving compounding
services. They use to collect various types of plastics flakes along with the virgin
plastic and suggest customer (companies) in choosing appropriate plastic. An
Asha enterprise is one compounder whom we will sell our plastics.
14 | Q u a s a r P l a s t i c s
Competitor analysis
In plastic manufacturing market there is no specific brand name is existing so the
market is flooded by small companies which are in this business. So they are our
biggest direct competitors.
As we are also not alone as a supplier of PET to the companies as raw materials
there are many companies in this region which are supplying PET. Indira Plastics
is one of them who is currently selling all types of plastics items. So in case of
business to business market they are our direct competitors. Kanpur is plastic
recycling city of UP. The direct threat we will also have is with the companies
operating in Kanpur. But as the distance between Kanpur and Allahabad is
600km as well as the road is not in good condition, so it will not affect much.

Marketing strategy
The Company has chosen to focus on the production of plastic packaging
materials from recycled post-consumer beverage bottles. we have identified a
significant available market in the eastern part of UP. All of our initial marketing
strategy will be to secure contracts in that segment, and after reaching full
planned capacity, look to grow in concert with that segment and related markets.
We see little need at present for further market research and development, and
will focus on continually updating our production technology in an effort to remain
in the forefront of our chosen marketplace.
Product/ service strategy
The packaging companies require high quality and highly transparent PET
bottles. The companies which are producing mineral water will reject PET bottles
with even a small impurity/ opaqueness. So we the Quasar Plastics provide high
end PET flakes for the perfect packaging.
Quasar Plastics will apply recycling and extrusion technology managed by
decades of industry specific expertise to create a competitive advantage for its
clients. These processes will produce clean, cost-efficient, recycled raw material
for manufacturers of thermoform, laminate and other high value-added products,
and high strength packaging strapping for shippers of large products and pallets,
thereby reducing costs and creating a clear pricing edge among their
competitors.
Plastic bags and plastic sheets are now in high demand. And this demand is
driven by continuously increasing promotional activities.
Pricing strategy
As plastic products do not carry any brand name so only pricing and distribution
strategies will works to achieve competitive edge. The pricing strategy we will
use is penetration pricing. The price of all household plastic goods we will sell will
15 | Q u a s a r P l a s t i c s
be lower than the market price. Also for the PET flakes and bottles the price will
be lower than the competitors. A lower price enables me to get contracts of PET
bottles and sheets from various companies.
In case of kitchenware and other household products we will provide combo
offers and discounts which a common customer expects.
Distribution strategy
As I described before that firstly we will target Allahabad city and villages close to
it. We will have a distribution center in the Allahabad city which continuously
maintains the supply of goods. So the household plastics will be sold through
small local grocery shops from which the customers can get them easily. Apart
from this we will hire street hawkers who will roam around the city and sell the
goods door to door.
PET bottles will be stored in warehouse which is close to the facility itself. The
sales people will directly contact to the companies which require these bottles for
packaging and look for the contracts. In city as stated above that we will have a
distribution center, from that center we will distribute to whole sellers.
Advertising & promotion strategy
As I described we are in both B2C and B2B so for this we will use two different
promotional strategies. For B2C business we will use flyers which will have full
detail of our product range, price, combo offers and discounts. These flyers will
circulate through the newspapers across whole city. For B2B business we will
promote through online social media and we will also develop our website
through which enable us to widely spread our contact among various companies.
the site will have full details of product which are available for companies as well
as end user.
Sales strategy
The strategy of sales effort will be to convert potential and first time customers
into long term customers. Our sales strategy is totally based upon the distribution
channel and the pricing strategies. We will have a distribution centre in the city
that will take care of sales of household and also supply products to the
wholesalers. We will also give the industrial customers a facility to order the
products through our website which will help them in reducing the delivery time.
To market the products, the Company will use a number of sales agents/brokers.
They have a customer base of their own, having developed successful
relationships with their client over the years. Their customer base is currently
demanding product so they can expand upon their current base. Of course, they
will expand that to new customers when product is available.
If the Company grows faster than its prime customer base, additional capacity
may be developed. We will identify additional prospective customers who can be
attracted for our products.

16 | Q u a s a r P l a s t i c s
Marketing & sales forecast
The first month prior to the opening will be used to get the new office in order, set
up appointment and begin marketing activities. In the first month we will focus on
the generating public visibility. The sales forecast is based on the assumption
that we will sell all of the highest volume PET bottles that we can produce.
This flake will be sold to other manufacturing companies. Recycling industry is
growing with 15-20% each year. So we can assume that we will grow with at
least 20%. There is a continuing strong demand for flake and extruded
products made from recycled PET.

Sales forecast
year 1 year 2 year 3 year 4
Annual
sales 1620000 2106000 2737800 3559140
Monthly
sales 135000 175500 228150 296595
PET Sales 94500 122850 159705 207617
Household
items 40500 52650 68445 88978.5

Development
The development of Quasar plastics required to accomplish a series of action
and formalities. Since we are new in the market we kept our production is low
initially, as demand will increase the production will be enhanced respectively.
Now we are recycling and producing only two types of plastics i.e. PVC and PET,
as we grow we will produce a wide the range of plastics and its finished product. .
The development process involves following steps:
• Legal formalities
• Office/business setup
• Future offerings and expansion plan
Development strategy
In future we are looking for the production of a variety of plastic. These plastics
will be
• LDPE ( Low density polyethylene)
• HDPE ( High density polyethylene)

17 | Q u a s a r P l a s t i c s
LDPE plastic is used in the production carry bags and other plastic sheets as well
as cling wrap, car covers, squeeze bottles, liners for tanks and ponds, moisture
barriers in construction. And HDPE plastics are used in production of freezer
bags, water pipes, wire and cable insulation, extrusion coating.
Our development strategy will base on timely completion of the establishment of
the business centre with low execution cost. Our strategy will focus not only the
current uninterrupted production of PVC and PET and acquisition of customer as
fast as we can, but we will also look for the future expansion plan and execution
strategy.
Our future development strategy will focus on to chart out a careful plan for the
future expansion and growth of our business. The development strategy will
address following issue:
• How will we expand our services?
• Which are the new areas we will include to provide our services?
• What will be the format of the business

Our development strategy will address all those above mentioned point. As
we will grow and our earning will increase, we will produce more of PVC and
PET as well as expand in new area. We have a development strategy to
expand our facility size in order to meet the production size.

18 | Q u a s a r P l a s t i c s
 Management

The company will be managed by promoter and six supporting staff.

Rajnish Kumar Chaubey, a MBA graduate with specialization in Marketing and
Finance is the owner and promoter of Quasar Plastics. He has intensive
knowledge and vast understanding in financial areas like Risk and Return
management, Investment portfolio and Capital Budgeting, which undoubtedly will
be of intense help in the business. Apart from this he also has a good knowledge
of chemicals and their properties
Marketing skills like convincing power, negotiating ability, creating promotional
strategies and sales skills will all be extremely helpful in taking the business a
long way and will prove intensely valuable to take Quasar Plastics to flaring
heights.
Thus with such potential skills, and other qualities like efficient interpersonal
skills, leadership skills and decision making quality, aptly makes him the best
promoter and eligible founder and owner of Quasar Plastics
Along with promoter five more employees will work for the accomplishment of
companies’ objective. One supervisor will work on the facility along with two
supporting staff. Supervisor who will work upon the facility does not need to be a
chemical engineer a simple technician has experience on working upon the
facility can be able to do this.
Job description

Process No of employees Proficiency

Sorting 2 unskilled
19 | Q u a s a r P l a s t i c s
Belt Conveyer 1 semiskilled
PET Separator 1 semiskilled
Packaging 4 unskilled

Operations
The operations is defined as the process used to deliver your products and
service to the customer market place and also include manufacturing
transportation logistics travel and after sales services.
The facility is located at outside the city. Facility is divided in two parts
• Recycling and Production unit
• Warehouse
The facility is located in an area of 3000 sqft..Apart from these two units there
will be an office which will look for the perpetual supply of required raw material
and also take care about the outbound logistics. The production capacity is
80kg/hr.
The operations will be based upon JIT i.e. just in time. We will have contracted
with the suppliers who can supply the raw material as quickly as we want. The
raw material contains post consumer beverage bottles and other plastic
materials. The bottles and other plastic material that can be recycled have a
specific sign from which it can be identified that it can be recycled or not.
The plastic is then transferred to respective unit to be recycled because PET and
PVC cannot be recycled simultaneously due to their different properties. There
will be two units running parallel to each other. On unit will recycle and produce
PVC plastic and other will perform the same for the PET plastic.
The recycled PVC is then moved for the plastic injection molding unit in the
various shapes. Since there are a variety of product is being produced so the
preference will be given to that product whose demand is high. All the products
will not be produced each and every day. There will be different products which
will be produced on different day according to the demand in market.
After the recycling process is completed one part of PET flake is moved to the
warehouse according to the demand of raw material which different companies
need and other part will move for the molding in bottles.

20 | Q u a s a r P l a s t i c s
The recycled PET flake is then heated and made the viscous solution of it. The
PET resin is then feeded to the molder and molder will give it various shape
bottles. And then it left for drying. Those products which further need for
processing like buckets, the handle will be inserted after the bucket is dried.
Stages of Recycling and Production
The process of recycling of waste plastics into products of varying usefulness
involves the following essential steps:
• Sizing / Chipping
• Cleaning
• Segregation.
• Agglomerating / Colouring
• Extrusion / Palletisation
• Fabrication into end Product.

Chipping:
The plastics waste is then required to be properly sized so that those may be
fed into the extruders for processing and palletizing. The sizing operation
depends on the type and shape of the waste plastics.
During this process, attention is required to separate any powdery material
from the sized / chipped plastics.

Segregation:
Certain polymeric materials are compatible with each other at all proportions.
For example LDPE and Lldpe are generally compatible to each other at all
proportions.
The advanced technology of separating / segregating different types of waste
plastics involves ‘Floatation Process’. In this process the property of the
varying densities of different plastics is made use of for segregating different
types of plastics.
However in the Indian Context, this separation or segregation process, in
many cases, are done by manual process utilizing the availability of cheap
and expert labor force. In case the waste is contaminated with embedded
metals, proper method of separating the metals / other contaminants is
required.

Cleaning:
The scale of cleaning depends on the type of waste. Whenever a cleaning
operation is involved, it is to be ensured that the water or any other cleaning
21 | Q u a s a r P l a s t i c s
 material used, should be discharged after ascertaining that the discharge
does not contain any objectionable substance. A proper Treatment Device
may have to be deployed – like a water treatment plant / effluent treatment
plant. For drying, a suitably designed drier is used.
Many industries situated outside the metropolises, use open space for natural
drying of the cleaned waste.

Agglomerating / Colouring
In the next operation the sized plastics waste is mixed with colour master
batch in high-speed mixers / agglomerators and the output is ready for
extrusion into pellets.
Extrusion / Palletisation
This is the most important part of the process wherein the sized / chipped
plastics are plasticized and granulated to make the plastics material ready for
fabrication next.
The type and size of the Extruder depend on the type and volume of the
plastics waste.
Fabrication into end Product
Finally the reprocessed plastics granules are used as raw material for
producing end products using similar fabrication machines like Injection
Molding / Extrusion etc., depending upon specific requirement.

Scope of operations
Now presently our production capacity is 200kg/day from which in initial stages
we are utilizing around 50% of it. As the business expands we will reach to
optimum capacity utilization. We are expecting that we will start producing more
advance plastics in the fourth year of our operations and accordingly the sales
will increase and the facility will have to be expanded.
Supply chain
In the city there are various small post consumer plastic bottle collectors. To
make a continuous supply of raw material we will have four suppliers with us.
There will be one permanent supplier which will continuously supply the raw
material. In case of excess demand other suppliers will be taken into
consideration. The transportation cost will be covered by supplier only. The
finished product will be stored in the warehouse and according to the demand it
will be send to city distribution centre. The distribution center will directly sell the
finished household plastics as well as to the small shops.
Our average daily demand of raw material is 300kg and the lead time we will
keep lead time of 6hrs. We keep a safety stock of 50 kg. So the reorder point is
given by
Reorder point= average daily uses x lead time + safety stock
22 | Q u a s a r P l a s t i c s
Reorder point = 300 X .25day + 50
= 125 kg.
So at each and every day we will have minimum of 125kg (safety stock+ reorder
point) of raw material in our inventory.

This means that when the raw material level reaches to 125kg we will place the next
order. The difference time in which we will place the order and receive the order is the
lead time which is 6hrs.

23 | Q u a s a r P l a s t i c s
 Process flow chart

Gantt chart

24 | Q u a s a r P l a s t i c s
As it is an assembly line the output of one stage is feeded to the input of next stage. The
whole process will run in series format. That is the reason why no parallel process is
mentioned in the gantt chart.

Facility Layout

25 | Q u a s a r P l a s t i c s
Financials
26 | Q u a s a r P l a s t i c s
The startup cost of our business is as follows:

Start-up
Requirements Amount
Start-up Expenses
Legal 6,000
Stationery 500
Business Cards 500
Initial Mailing 100
Process Funding 400
Office Equipment 2,500
Total Start-up Expenses 10,000

Start-up Assets
Cash Required 1,00,000
Other Current Assets 0
Long-term Assets 33,30,000
Total Assets 34,30,000

Total Requirements 34,40,000

Income statement
The projected income is as shown below it shows that first year we will end
up with loss but from second year we will start making profits.
YEAR
Particulars 1 YEAR 2 YEAR 3 Year 4
27 | Q u a s a r P l a s t i c s
 16200 210600 273780
net sales 00 0 0 3285360
cost of good 89100 115830 150579
sales 0 0 0 1806948
72900 123201
gross margin 0 947700 0 1478412
operating
expenses:
admin exp. 3000 3150 3308 3473
Advertisement 6000 7200 8640 10368
19200
Salaries 0 211200 232320 255552
Transportation 96000 105600 116160 127776
Maintenance 15000 15750 16538 17364
Electricity 4800 5040 5292 5557
Telephone 10000 11000 12100 13310
Legal exp. 10000 1000 1000 1000
Insurance 20000 20000 20000 20000
Rent 24000 26400 29040 31944
other exp 6000 6600 7260 7986
38680
0 412940 451657 494330
34220
EBITDA 0 534760 780353 984082
less 30300
depreciation 0 272700 245430 220887
EBIT 39200 262060 534923 763195
Less interest 17555
paid 0 165061 153243 139926
-
13635
EBT 0 96999 381680 623269
tax @ 30% 0 29100 114504 186981
28 | Q u a s a r P l a s t i c s
 -
13635
PAT 0 67899 267176 436288

Balance sheet
The projected balance sheet of four years is as follows:
Sources of Funds Year-1 Year-2 Year-3 Year-4
Capital
Owner's capital 1930000 1930000 1930000 1930000
Surplus -136350 -68451 130274 765287

Net worth 1793650 1861549 2060274 2695287

Long Term loan
Loan 1417302 1324116 1219111 1100789
Current Liabilities
Creditors 70500 56722 68066 81680

Total liabilities 3281452 3242387 3347451 3877756

Application of fund
Plant & M/C 3030000 2727000 2454300 2208870
Less depreciation 303000 272700 245430 220887
2727000 2454300 2208870 1987983
Land 300000 300000 300000 300000
Actual Fixed Asset 3027000 2754300 2508870 2287983
Current Assets:
Inventory 97200 315900 410670 821340
Bank 10000 40000 100000 100000
Debtors 147252 132187 117911 232703
Advance to suppliers’ 0 0 210000 335730
Investment 100000
Total Assets 3281452 3242387 3347451 3877756

29 | Q u a s a r P l a s t i c s
Break Even Point
Amount Amount
VC in Rs FC in Rs
Admin 3000
other exp 6000 Interest 175550
transportati advertisem
on 96000 ent 6000
telephone 10000 Insurance 20000
wages 119250 Salary 192000
carriage
inward 238500 Rent 24000
maintenan
power 119250 ce 15000
depreciatio
raw material 414000 n 303000
Legal 10000
total 1003000 Total 748550
contributio
n 617000

pv ratio 0.3808642

1965398.70
BEP units 3 135000
BEP SALES 15 in months

1.21 In years
30 | Q u a s a r P l a s t i c s
As the BEP is 15months it means that at 15th month we will be in a trade off
total expenses and revenue.

Appendix
Annuity table:
total loan pmt[1-1/(1-
amt.= i)^n]/i
n is number of
years
i is interest rate
150000 ###
loan amount 0 ###
interest rate ###
annually 0.12 ###
pmt 21520.
= 21521 64

princi balanc Annual

month EMI Interest ple e O/S interest
2152 149347
1 1 15000 6521 9
2152 148689
2 1 14935 6586 4
2152 148024
3 1 14869 6652 2
2152 147352
4 1 14802 6718 4
2152 146673
5 1 14735 6785 8
2152 145988
6 1 14667 6853 5
2152 145296
7 1 14599 6922 3
2152 144597
8 1 14530 6991 2
2152 143891
9 1 14460 7061 1
2152 143178
10 1 14389 7132 0
2152 142457
11 1 14318 7203 7
31 | Q u a s a r P l a s t i c s
 2152 141730
12 1 14246 7275 2 175550
2152 140995
13 1 14173 7348 4
2152 140253
14 1 14100 7421 3
2152 139503
15 1 14025 7495 8
2152 138746
16 1 13950 7570 8
2152 137982
17 1 13875 7646 2
2152 137209
18 1 13798 7722 9
2152 136430
19 1 13721 7800 0
2152 135642
20 1 13643 7878 2
2152 134846
21 1 13564 7956 6
2152 134043
22 1 13485 8036 0
2152 133231
23 1 13404 8116 3
2152 132411
24 1 13323 8198 6 165061
2152 131583
25 1 13241 8279 6
2152 130747
26 1 13158 8362 4
2152 129902
27 1 13075 8446 8
2152 129049
28 1 12990 8530 8
2152 128188
29 1 12905 8616 2
2152 127318
30 1 12819 8702 0
2152 126439
31 1 12732 8789 1
2152 125551
32 1 12644 8877 5
2152 124654
33 1 12555 8965 9
2152 123749
34 1 12465 9055 4
2152 122834
35 1 12375 9146 8
32 | Q u a s a r P l a s t i c s
 2152 121911
36 1 12283 9237 1 153243
2152 120978
37 1 12191 9330 2
2152 120035
38 1 12098 9423 9
2152 119084
39 1 12004 9517 2
2152 118122
40 1 11908 9612 9
2152 117152
41 1 11812 9708 1
2152 116171
42 1 11715 9805 6
2152 115181
43 1 11617 9903 2
2152 114181
44 1 11518 10003 0
2152 113170
45 1 11418 10103 7
2152 112150
46 1 11317 10204 4
2152 111119
47 1 11215 10306 8
2152 110078
48 1 11112 10409 9 139926
2152 109027
49 1 11008 10513 7
2152 107965
50 1 10903 10618 9
2152 106893
51 1 10797 10724 5
2152 105810
52 1 10689 10831 3
2152 104716
53 1 10581 10940 4
2152 103611
54 1 10472 11049 5
2152 102495
55 1 10361 11159 5
2152 101368
56 1 10250 11271 4
2152 100230
57 1 10137 11384 0
2152
58 1 10023 11498 990803
2152
59 1 9908 11613 979190
33 | Q u a s a r P l a s t i c s
 2152
60 1 9792 11729 967461 124920
2152
61 1 9675 11846 955615
2152
62 1 9556 11964 943651
2152
63 1 9437 12084 931567
2152
64 1 9316 12205 919362
2152
65 1 9194 12327 907035
2152
66 1 9070 12450 894584
2152
67 1 8946 12575 882010
2152
68 1 8820 12701 869309
2152
69 1 8693 12828 856481
2152
70 1 8565 12956 843526
2152
71 1 8435 13085 830440
2152
72 1 8304 13216 817224 108010
2152
73 1 8172 13348 803876
2152
74 1 8039 13482 790394
2152
75 1 7904 13617 776777
2152
76 1 7768 13753 763024
2152
77 1 7630 13890 749134
2152
78 1 7491 14029 735104
2152
79 1 7351 14170 720935
2152
80 1 7209 14311 706624
2152
81 1 7066 14454 692169
2152
82 1 6922 14599 677570
2152
83 1 6776 14745 662825
34 | Q u a s a r P l a s t i c s
 2152
84 1 6628 14892 647933 88957
2152
85 1 6479 15041 632892
2152
86 1 6329 15192 617700
2152
87 1 6177 15344 602356
2152
88 1 6024 15497 586859
2152
89 1 5869 15652 571207
2152
90 1 5712 15809 555398
2152
91 1 5554 15967 539432
2152
92 1 5394 16126 523305
2152
93 1 5233 16288 507018
2152
94 1 5070 16450 490567
2152
95 1 4906 16615 473952
2152
96 1 4740 16781 457171 67486
2152
97 1 4572 16949 440222
2152
98 1 4402 17118 423104
2152
99 1 4231 17290 405814
2152
100 1 4058 17462 388352
2152
101 1 3884 17637 370715
2152
102 1 3707 17813 352901
2152
103 1 3529 17992 334910
2152
104 1 3349 18172 316738
2152
105 1 3167 18353 298385
2152
106 1 2984 18537 279848
2152
107 1 2798 18722 261126
35 | Q u a s a r P l a s t i c s
 2152
108 1 2611 18909 242216 43293
2152
109 1 2422 19098 223118
2152
110 1 2231 19289 203829
2152
111 1 2038 19482 184346
2152
112 1 1843 19677 164669
2152
113 1 1647 19874 144795
2152
114 1 1448 20073 124722
2152
115 1 1247 20273 104449
2152
116 1 1044 20476 83973
2152
117 1 840 20681 63292
2152
118 1 633 20888 42404
2152
119 1 424 21097 21308
2152
120 1 213 21308 0 16031

Bibliography
• Crisil report on plastic industry
36 | Q u a s a r P l a s t i c s
 • Plastic waste option for small scale recourse recovery by Inge
Lardinois
• Small scale recycling of plastic by- Jon Vogler

37 | Q u a s a r P l a s t i c s