WASTE TO WEALTH SERIES

Business Plan for

Manufacturing EGG
TRAY from Waste Paper
650 Trays/Hr (30 Cavity
Tray)
or 15,000 Trays/Day

in

Nigeria

Submitted by : Onella Consulting Pvt Ltd, India

Project Proposal submitted by
WASTE TO WEALTH SERIES

1. Products Planned and Capacity

Egg Tray

2. Process Description and Production Flow Chart

3. Equipment List and Specifications

4. Plant Details

5. Project Details

6. Project Financials

Project Proposal submitted by

WASTE TO WEALTH SERIES

1. Products Planned, Capacity Planned and Production Details

Egg Tray:

The project involves converting waste paper into useful products like egg trays that
are salable and is in demand. A sophisticated machine, Paper Pulp Moulding System
for Egg Trays (Egg Filler Flats) is used for making Egg Trays.

The machine is capable to manufacture different size and shapes for Trays. Some of
the designs for Egg Trays are as follows:

6 Cavity Egg Tray

30 Cavity Egg Tray

18 Cavity Egg tray

Project Proposal submitted by

WASTE TO WEALTH SERIES

Colour Egg Tray

The plan would be capable for products of all the above products. The
Project is planned with the capacity of 650 Trays/Hr. The plant is designed
for 24hrs working. The plant is capable for production of about 15,600
Trays/Day @100% Capacity. The actual production, which can be achieved
is as follows:
For all the Projection, we have assumed Production of Egg Trays with 30
Cavities.

Daily Production Details:

Year 1 Year 2 Year 3 Year 4 Year 5
Capacity Utilization 75% 80% 85% 85% 85%
Daily Production Units
Egg Trays (Nos) 11,700 12,480 13,260 13,260 13,260
Yearly Production Details

Year 1 Year 2 Year 3 Year 4 Year 5

Capacity Utilization 75% 80% 85% 85% 85%
Yearly Production Units
Egg Trays (Nos) 3,861,000 4,118,400 4,375,800 4,375,800 4,375,800

Working Days in Year assumed as 330 Days. The plant is capable

for working more than 350 Days/Year.
Sales Price is assumed as Naira 40/ Pcs Ex Factory, although the Sales
Price is more than this.

Project Proposal submitted by

WASTE TO WEALTH SERIES
2. Process Description and Production Flow

Chart Manufacturing Process of Egg Tray Making

Waste Paper, even the lower grades is converted into pulp of 4 % consistency in a
critically designed Hydrapulper. The pulp so formed in the Hydrapulper flow through a
pulp screen and a vibrator before being discharged to a pulp hold. Here wax, alum etc.
are added and diluted to about 1% consistency under constant agitation. The same is then
pumped into an overhead pulp tank with special agitator and discharge section. The pulp
by gravity flow enters the Moulding unit and overflows. The forming mould gets filled
with the pulp which is sucked through the surface of the mould by vacuum pull which
leaves a fill of solid paper fibre in the shape of the mould. The transfer mould gives a
puff of controlled compressed air uniformly, to discharge the wet tray and drop it to the
prepositioned pallet for inline Dryer. After Dryer the tray moves to compacting machine
through conveyor.

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3. Equipment List and Specifications

EQUIPMENT DETAILS AND DESCRIPTION

S. No ITEM DESCRIPTION PHOTO QTY
NAME
1 Hydrapulper Heavy duty construction in
Mild Steel with preventive
rust
coating. The cutter is made of
SS to ensure uniform and 1 No
aggressive pulping with less
input of power and time. Fitted
with suitable AC motor with
drive pulley and belt.
2 Agitator This assists to maintain
uniform consistency of pulp in
the storage tanks 1 No

3. Vibrator This assists to screen possible

Screen impurities like metal, plastic,
wood etc. Driven by suitable 1 No
AC motor

4 Vacuum This is used to create vacuum

pump to suck the water from the
With motor, moulds. Fitted with suitable 1 No
AC
Water motor complete with pulley and
separator belt
Tank &
water
Pump
5 Pulp Lifting This pump is used to lift the
Pump pulp from the tank to the No Picture 1 No
moulding machine and back.
Driven by a suitable AC motor.
6. Valves & To Control the process and to
Piping Transport the pulp and water No Picture 1 No
Project Proposal submitted by
WASTE TO WEALTH SERIES
B. Forming Section:
S. ITEM NAME DESCRIPTION PHOTO QTY
No
1 Reciprocating This machine is used to
Moulding make pulp moulded
machine products using relevant
moulds from the pulp. 1 No
Reciprocating Moulding
machine complete with
pulp tank and with PLC
controlled user-friendly
control panel.

2 Standard size To produce 30-cavity egg

30-cavity Egg trays
tray mould set of standard size 1 Set
consisting of 4
Nos of forming
moulds and 4
Nos. of
transfer
moulds

Project Proposal submitted by

WASTE TO WEALTH SERIES

C. DRYING SECTION
S. ITEM NAME DESCRIPTION PHOTO QTY
No
1 On Line On-Line conveyorised
Dryer Drier with Multi-pass
movement to save energy,
space, fuel consumption 1 No
etc.
Fitted with suitable drives
and supplied with suitable
control panel. Provided
with insulated walls to
conserve maximum
possible heat energy
2 Gas heating To supply heat to the
System drying chambers by heating 1 No
the air using Gas as fuel
3. Finished To deliver the dried
Product product from the Drier to 1 No
Delivery Packing section.
Conveyo
r

D. PACKING SECTION
S. ITEM NAME DESCRIPTION PHOTO QTY
No
1 Compacting To Press and compact the
Machine finished trays to save
shipping space
1 No

4. Plant Details:

Project Proposal submitted by

WASTE TO WEALTH SERIES
The plant is designed for continuous 3 Shift working. The plant is designed with required
automation keeping Nigeria conditions in mind.

The plant is designed with all the required accessories and utility equipments for continuous working.

Total Building Required : 400 - 500 Sq. Mtrs

Recommended Space Required for complete Factory : About 300 Sq Mtrs

(Machine Length 30 Feet, Width 25 Feet and Height 15 Feet)

Total Electricity Required : About 125- 150 KW

The Generators are planned with for Backup generators.

The complete Electricity Network is planned with following options:

a. Electrical Connection from NEPA

b. Backup Generation using Diesel Generators

Total Employment Generation

Total Workers : About 20

Engineers and other Staff : About 5

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WASTE TO WEALTH SERIES

Engineering Drawing and Technical Support

We would offer the following services:

a. Complete Engineering Services for complete plant including

i. Building Drawing

ii. Complete Engineering Service Drawings

iii. Project Engineering Services

iv. Project Management Services

b. Technical Services include

i. Plant Layout

ii. Utility Layout

iii Utility balancing

iv. Technical know how for Production

v. Man Power Training

We can also arrange the following Expats for:

1. Plant In charge

2. Production In charge

3. Production Planning & Control

4. Production Managers for each Section

The expats would be coming as Employees of the company on contract.

Project Proposal submitted by

WASTE TO WEALTH SERIES

Commercial Details:
Cost of Plant, Service Utility, Freight Cost Installation and other Cost:

S.No Description Qty Total Amount

(USD)
1. Egg Tray Making Plant 1
(As per details given Above)
TOTAL 180,000

Cost of Utility Services and Equipments:

S.No Description Nos Total Amount
(USD)
1 Power Plants (NEPA Substation, Diesel Generators) 1 Set
2 Electrical Set up Including Distribution Panels, Wires, 1 Set
Cables, Earthing, Indoor Lighting, Outdoor Lighting
3 Pumps 1 Set
4 Piping 1 Lot
5 Compressor 1 Nos
6 Weighing Scales 1 Lot
7 Others Misc equipments 1 Lot
8 Fire Fighting 1 Set
Total Utility USD 45,000

Total FOB Cost of Plant, Utility & Services 295,000

Freight Cost (Lagos Port) Total 3 Containers 15,000
Total Installation Cost Including Cost of Travel, Cost 10,000
of Expert, Supervision Cost, Visa Fee etc (Local
Lodging and Boarding Expenses to be borne by client)
Total Installed Cost (USD) 250,000

Project Proposal submitted by

WASTE TO WEALTH SERIES

6. Project Financials
Estimated Calculation of Building:

The Building required is about 300 Sq Mtrs and can be taken on lease. We have assumed
cost of lease of about Naira Million 5.00 in 1st year with increase of 15% yearly.

Estimated Project Cost

S No Description Million Naira
1 Plant & machinery 57.64
2 Pre-operative expenses 5.90
3 Contingent expenditure 6.35
4 Working capital (1st year) 5.15

Total Project cost 75.05

Project Highlights:
Details
Break-even point (3rd Year) 37%
Debt service coverage ratio 4.91
Internal rate of return 42%
Pay-back period (Years) 1.30
Interest rate - Term Loan 21%
Promoters Contribution 33%

If you take loan from India the cost would be much cheaper

Project Proposal submitted by

WASTE TO WEALTH SERIES
Estimated Machine Prices:
Particulars No. of BASIC Total Cost Currency EX- NET
M/cs COST USD RATE COST
Egg Tray Making Plant 1 250,000 250000 USD 200.00 50.00
Sub Total 1 250000 50.00
Total 50.00

Total of Imported Plant and Machinery Million Naira 50.00

Add Import Duty, Clearing Expenses, Local 13.00% 6.50
Transportation etc.

Total Plant and Machinery Cost 56.50

Calculation of Working Capital:

DESCRIPTION 1st Year

No. of Months Amount Required
Required
STOCK OF INVENTORIES
1. Raw Material
-Indigenous 0.15 0.11
2. Consumables
-Indigenous 0.25 0.01
3. Stock of Work-In-Progress 0.04 0.16
4. Stock of Finished Goods 0.10 1.29
Sub Total 1.56
SUNDRY DEBTORS
5.Bill Receivable/ Goods in transit 0.20 2.57
Sub Total 2.57
OTHER CURRENT ASSETS/
CONTINGENCIES
6. Utilities 0.25 0.30
7. Labour & Plant Overheads 0.25 0.30
8. Factory Overheads 0.25 0.18
9. Administrative Expenses 0.25 0.18
10. Other Expenses 0.25 0.06
1.02
Total 5.15

Project Proposal submitted by

WASTE TO WEALTH SERIES
Expected Yearly Sales:
Sales of Egg Trays Million Naira
Yearly Sales Value Year 1 Year 2 Year 3 Year 4 Year 5
Egg Tray 154 165 175 175 175

Total Sales Value 154 165 175 175 175

Raw Material Required:

Raw Material Kgs/ Year
Year 1 Year 2 Year 3 Year 4 Year 5
Capacity Utilization 75% 80% 85% 85% 85%
Waste Papers 253,475 270,373 287,271 287,271 287,271

Total 253,475 270,373 287,271 287,271 287,271

Cost of Waste Papers : Naira 35/ Kgs (The Price of waste paper is much less
than this price as per our Market Survery)

Value in Million Naira

Summary Year 1 Year 2 Year 3 Year 4 Year 5
Waste Papers 8.87 9.46 10.05 10.05 10.05
Total Raw Material 8.87 9.46 10.05 10.05 10.05
Total Electricity Cost and Fuel Cost:

Cost of Electricity : Naira 32/ Unit of KWH

Cost of Gas : Naira 65/ Kg

Million
Naira
Summary Year 1 Year 2 Year 3 Year 4 Year 5
Capacity Utilization 75% 80% 85% 85% 85%

Cost of Electricity 12.93 13.79 14.65 14.65 14.65

Cost of Fuel 1.28 1.36 1.45 1.45 1.45
TOTAL 14.20 15.15 16.10 16.10 16.10

Project Proposal submitted by

WASTE TO WEALTH SERIES

Estimated Working Results:

Description Year 1 Year 2 Year 3 Year 4 Year 5
75% 80% 85% 85% 85%

a. Cost of Production 46.61 50.15 53.81 54.88 56.09

b. Administrative Expenses
-Administrative Salaries 8.40 8.40 8.40 8.40 8.40
- Other Admin. Overheads 1.00% 1.54 1.65 1.75 1.75 1.75
Total Admn. Expenses 9.94 10.05 10.15 10.15 10.15
c. Sale Expenses 5.00% 7.72 8.24 8.75 8.75 8.75
d. Total Cost Production 64.28 68.44 72.72 73.78 75.00
e. Expected Sales Ex-factory 154.44 164.74 175.03 175.03 175.03
f. Gross Profit Before interest 90.16 96.30 102.32 101.25 100.04
g. Financial Expenses
-Interest on IC Loan 11.00 11.00 9.00 7.00 4.00
-Bank Charges 1% 0.77 0.82 0.88 0.88 0.88
h. Total Financial Expenses 11.77 11.82 9.88 7.88 4.88
i. Depreciation 6.61 6.61 6.61 6.61 6.61
j. Operating Profit (h-j-k) 71.78 77.86 85.83 86.77 88.55
k. Profit/ Loss before Tax 71.78 77.86 85.83 86.77 88.55
l. Provision for Tax 22.63 25.19 28.29 28.98 29.89
m. Profit after Tax 49.15 52.68 57.54 57.79 58.66
n. Retained Profit 49.15 52.68 57.54 57.79 58.66
o. Add Depreciation 6.61 6.61 6.61 6.61 6.61
p. Add Back Preliminary Expenses - - - - -
q. Net Cash Accruals 55.76 59.29 64.15 64.40 65.27

Project Proposal submitted by

WASTE TO WEALTH SERIES
Break Even Analysis:
DESCRIPTION Year 1 Year 2 Year 3
A. Sales Realisation 154.44 164.74 175.03

B.- Raw material 8.87 9.46 10.05

- Consumables 0.51 0.54 0.57
- Bank charges 0.77 0.82 0.88
- Utilities 14.20 15.15 16.10
- Sales Expenses 7.72 8.24 8.75
Total B 32.08 34.21 36.35

C. Contribution (A-B) 122.36 130.52 138.68

D. Fixed costs
- Salary & wages 14.36 15.32 16.28
- Factory overheads 8.67 9.68 10.81
- Administrative overheads 8.40 8.40 8.40
- Interest on F/C loan
- Interest on R/C loan 11.00 11.00 9.00
- Depreciation & Preliminary
Expenses 6.61 6.61 6.61
Total D 49.04 51.01 51.10

BREAK EVEN POINT D/C (%) 40% 39% 37%

Project Proposal submitted by

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Pay Back Period:

DESCRIPTION Year 1 Year 2 Year 3 Year 4 Year 5
A. Investment

1. Total Investment 75.18

2. Less Margin Money 5.28

Net Investment (1-2) 69.89

B. Net Inflows

1. Net Profit after Tax 49.15 52.68 57.54 57.79 58.66

2. Depreciation 6.61 6.61 6.61 6.61 6.61

Total 55.76 59.29 64.15 64.40 65.27

-
Cumulative 55.76 115.05 179.20 243.60 308.87

Pay back period { 69.89 - 115.05 } (45.15)

2.00 + ---------- ------- -------- = --------
{ 179.20 - 115.05 } 64.15
= (0.70)

2.00 + (0.70) = 1.30 Years

Project Proposal submitted by