WINTER PROJECT REPORT (BUSINESS PLAN)

ON

JUTE PRODUCT MANUFACTURING UNIT

A project submitted to Udaybhansinhji Regional Institute of Cooperative Management,

Gandhinagar for the award of Post Graduate Diploma in Agri Business Management in

semester Vth, Batch 2021-2023

By: Vishal Patel

RollNo: 14212340

Guided By: Dr.Gincy Mathew

(Professor)
 DECLARATION

I declare that the project title JUTE PRODUCT MANUFACTURING UNIT submitted by

me for the degree of Post Graduate Diploma in Agri Business Management is the record

of research work carried out by me during the period from December 1 st to December 30th

under the guidance of Dr.Gincy Mathew. The research work is original and all resources have

been duly acknowledged it is an unpublished research work.

Signature of the student

Name of the student: Vishal Patel

Date: 28th December 2022

Place: Gandhinagar.
 Certificate

This is to certify that Mr.Vishal Patel (2nd year PGDM, ABM) of URICM, Gandhinagar has

completed his winter project titled Business plan on JUTE PRODUCT

MANUFACTURING UNIT. Under my supervision and Guidance. The tasks given to him

are completed in all respects.

We wish good success for his future assignments.

Project Guide
Dr.Gincy Mathew

Professor.
 ACKNOWLEDGEMENT
Firstly, I fervently pray almighty god with whose grace and blessing I am was able to
accomplish this task.

This acknowledgement is not merely a catalogue of names but an expression of a deep sense
of gratitude to all those who helped me in undertaking this project. I owe a great deal to
URICM for laying the building blocks of logic and pragmatism in my life. This report, in a
way reflects these values. This project provided me a great practical learning experience.

I would like to thanks our project guideDr.Gincy Mathew for herguidance, valuable
Suggestions, and kind support that helped me in completing this report.

I feel immense pleasure in expressing my sincere thanks and profound sense of gratitude to
Dr. A. K. Asthana, Director, URICM, Ms. Neelu Pandey, Programme Director, URICM.

I am thankful to my Relatives & Colleagues who have supported me a lot for making this
project successful

I am very much thankful to all my Friends & Classmates for their cooperation directly or

indirectly in completion of project work.

Last, but not the least, I think that the words are insufficient to express deep sense of feeling

and respect towards My Parents & Family, without their encouragement, blessing and

benediction it would not be possible to me to complete this course. Their patience and
sacrifice

always have been the vital source of inspiration for me.

Ms.Gincy Mathew
(PGDM-ABM)
 PREFACE

Practical study plays a vital role in a field of education. How management principles are

implemented in business can only be known through practical study, students can be very

well aware about industrial environment like problems, opportunities, different situation etc.

This helps the student for better understanding and also gives them chance to show their

skills and ability.

This report throws lights to one of the key sectors of development. A Horticulture industry,

which has in the limelight due to its rapid development and emergence as a major contributor

to the export of country, which will lead towards economic progress of the country.

The report seems in such a manner that can give comprehensive and relevant aspect about the

Horticulture Industry and especially with respect to the papaya production increasing demand

in domestic and foreign market, which is racing towards capturing the large part of Agro-

processing market of the country.

I hope at the report is fulfilling all the requirements as per the rules and regulations.
 CONTENTS
EXECUTIVE SUMMARY ............................................................................................................... 6

COMPANY PROFILE ...................................................................................................................... 7

OBJECTIVES ................................................................................................................................... 7

MISSION .......................................................................................................................................... 8

VISION ............................................................................................................................................. 8

INTRODUCTION OF THE BUSINESS ........................................................................................... 8

REGISTRATION PROCESS ............................................................................................................ 9

ADVANTAGES ............................................................................................................................... 9

USAGE ............................................................................................................................................. 9

PRODUCTS.................................................................................................................................... 10

COMPANY OWNERSHIP ............................................................................................................. 11

START-UP COSTS AND FUNDING ............................................................................................. 11

MARKETING STRATEGIES ......................................................................................................... 11

MARKET POTENTIAL ................................................................................................................. 12

STP ................................................................................................................................................. 12

MANAGEMENT ............................................................................... Error! Bookmark not defined.

BUSINESS MODEL ....................................................................................................................... 12

REQUIRED RAW MATERIAL ...................................................................................................... 13

TYPES OF MACHINERY USED ................................................................................................... 13

MANUFACTURING PROCESS..................................................................................................... 13

MARKET DEMAND ...................................................................................................................... 14

BUSINESS OPPORTUNITIES ....................................................................................................... 14

SWOT ANALYSIS ......................................................................................................................... 15

PORTER’S FIVE FORCES MODEL .............................................................................................. 16

VALUE CHAIN ANALYSIS .......................................................................................................... 18

FINANCIAL PLAN ........................................................................................................................ 19

CONCLUSION ............................................................................................................................... 25
 EXECUTIVE SUMMARY

As the name itself implies the jute bags are used for shopping purpose.Now a

day the printed jute bags are used for travel purposes too. All the machineries

and raw materials used for its manufacture are easily available from indigenous

sources and as not much technology is involved manufacturing unit is located at

Indore in which the total product per annum is about 36Lakhs where, net profit

is 8lakhs per annum.The overall business plan includes the details process of

starting a business which ownership, strategies, analysis, demand, financial plan

etc.
 COMPANY PROFILE

Name of the Business Entity Rainbow Jute Works Private Limited

Year of establishment 2022
Location Indore
Website www.rainbowjuteworks.com
Activity involved Manufacturing of Jute products

Rainbow Jute Works Pvt.Ltd. was established in 2022. It is a friend's owned enterprise started

by 6 business enthusiastic friends. Starting from raw jute procurement to manufacturing the

final products of the Jute fiber, our chairman, Mr. Vishal Patel, has been actively involved in

the company. He was closely associated to the farmers, who were involved in Jute farming.

He always had a vision; we would love to see this eco-friendly fiber products reach all across

the India.The vision of 6 people helped the organisation to go in the right direction. The

management at Rainbow Jute Works Pvt.Ltd. involves Arvind, Ananad, Ram Patel,

Pradhumyan Patel and Ravindra from the friends.

The manufacturing unit is located at Indore. The product line involves manufacturing eco

friendly Jute bag for promotion bags for packaging, grocery bags, laptop bags, handbags etc.

OBJECTIVES

 For Creating a pollution free environment as jute is eco-Friendly products

 Making low-cost carry bags and fashionable products

 To make jute products as a part of our daily living

 Creating awareness about jute products

 MISSION

To provide different and efficient product manufacturing & sourcing ways that will help

solve challenges faced by clients and end-users.

VISION

To meet the growing needs of the people, to enable the availability of jute products to get

access to the domestic market at a competitive price.

INTRODUCTION OF THE BUSINESS

Jute is a naturally occurring or cultivated vegetable fiber. Jute fabric is made by spinning jute

fiber into strong threads and weaving it. It is known as golden fiber because of its shiny and

soft texture. It is the strongest natural fiber on the planet.

Since the seventeenth century, jute bags and jute products have been manufactured for

commercial use in India. Plastic gradually engulfed the jute market and replaced the majority

of jute products, but with the disadvantages and dangers of plastic revealed, jute bags have

successfully re-entered the market. All credit goes to increased awareness about using eco-

friendly products and government go-green initiatives.

Jute bags are strong, inexpensive, and reusable, with no negative consequences. Jute bags

were primarily used for sacking agricultural produce, sand, fertilizer, and cement. Jute bags

are now used for a variety of purposes, including shopping bags, lunch bags, sling bags,

purses, promotional gifts, travel bags, water bottle covers, and school bags.
 REGISTRATION PROCESS

The following are the major permissions required for setting up a jute bag manufacturing

unit.

 Trade license

 SSI unit registration

 ISO certification

 GST registration

 IEC code registrations

ADVANTAGES

Jute is a natural fibre. As a result of their biodegradability, jute bags are environmentally

friendly. Jute bags, unlike single-use plastic bags, are reusable. In a bag, they can carry

anything from light jewellery and gifts to heavy agricultural produce like wheat and paddy.

They are strong, long-lasting, light, and inexpensive. They are UV-protected and suitable for

use with food. They have anti-static properties. Travelers love fashionable printed and

decorative jute bags. Jute bags are an excellent promotional and complimentary product for

many brands because they last a long time and thus remind customers of the brand.

USAGE

Jute bags are used for the following purposes:

 Jute bags are used by students to transport books to and from school or college.

 Jute bags are now used by women as fashionable handbags. They are also used to

transport lunch to work.

 Jute bags can be used for both travel and transportation.

 These bags are also used for promotional purposes.

  Jute bags are multipurpose and can be used as gift bags.

 These bags are used as shopping bags all over the world. They are also used to

transport products from one location to another.

PRODUCTS

Our product range is as follows:

 Jute bags

 Printed & Decorated jute shopping bags

 Laptop bags

 Jute folders

 Handbags
 COMPANY OWNERSHIP

The company is owned and operated by 6 members where all the members have equal

ownership.

START-UP COSTS AND FUNDING

The cost in respect of plant and machinery, raw materials, and selling price of the finished

product are those generally obtained at the time of preparation of the project profile and may

vary depending upon other various factors .The salary and wages of staff and labor have been

taken as per the present market rate .Production utilization capacity is considered initially at

75% of the total capacity .The time period for achieving full envisaged capacity utilization is

three years .Working days per year is considered 300 days and working hours is

8hoursperdayconsideringa single shift .The rate of interest on a Bank loan has been

considered as 12% p.a .which may vary from time to time.

MARKETING STRATEGIES

Marketing strategies are the processes that businesses use to generate customer interest in

their goods or services. Marketing uncovers customers' hidden desires and generates new

demand. It expands the market and allows producers to increase production and profits.

Because of marketing, many other activities such as banking, transportation, insurance,

warehousing, and so on gain traction as they provide more assistance in the marketing

process.

Some techniques of marketing Jute Bag Business:

Word of mouth, Comprehensive website, Social marketing, Direct marketing, Major

festivals, Online shopping sites, NGO tie-ups, Local tie-ups, Corporate gifts, etc.
 MARKETPOTENTIAL

As plastic bags were banned there is more demand for paper bags and jute as of now the

demand for jute bags has increased a lot from last few years and also for the future of our

next generations. Decorated jute bags and shopping bags are fast selling in the domestic

markets. With the rise in population, the scope of business and industry expansion is also

possible. As bags are significant for humans, the need for products is steady in the market.

Hence, it could be projected that the demand will be steady throughout the year. Such

businesses have a great export potential too.

STP

 Segmentation: Middle class people, Upper class people, and foreigner customers

 Target: Retailers, Wholesalers, malls, website

 Positioning: Working people , Students

BUSINESS MODEL

Our Business model includes both B2B & B2C , Rainbow jute work Pvt. Ltd. Provide eco-

friendly jute bag. We manufacture a range of Promotional Bags and Shopping Bags with

customizable designs. Several companies use these environment friendly bags for

promotional purpose. These promotional bags can be used for branding of your company.

Our ability to print anything in your bags serves a high-quality marketing tool that could be

used by your company. According to the requirement of the clients, the bags are designed and

logos are printed accurately on tote promotional bags, promotional shopping bags,

promotional packaging bags, and many more. The promotional bags will increase the brand

exposure of your company. Also, we manufacture promotional bags in various sizes, styles,
handles, colors, and materials. The promotional shopping bags are custom-made to be

spacious enough to increase its utility.

REQUIRED RAW MATERIAL

The raw materials required for printed and decorated jute shopping bags are jute fabrics, dye

stuff, printing gum, chemicals and auxiliaries, PVC buckle and bamboo sticks, sewing thread,

packing materials, label etc .used .All the above raw materials are available locally.

TYPES OF MACHINERY USED

Jute bag manufacturing does not require high-end technology machinery. It all depends on

the scale and type of bags. To make a printed jute bag, the following machinery is required:

Working table, Lamination machine, Printing Table, Screen printing machine, Dye Paste

Stirrer, Water Drum, tubes, mugs, clips, etc., Cottage Steamer, Electric Fittings, Scissors and

measuring tape, Cutting machine, Heavy-duty Sewing machine, Regular sewing machine,

Nylon thread, Lockstitch Machines, Side Sealing Machine.

MANUFACTURING PROCESS

 Purchase woven jute fabric rolls from wholesalers or manufacturers. Jute fabric is

extensively available in West Bengal and Kolkata.

 Jute rolls should be laminated. Jute bags are available with or without lamination. If

you plan on selling laminated jute bags, laminate the jute rolls before cutting them.

 Place the jute fabric roll on a table and secure it.

 Cut the jute rolls to the size and shape needed.

 Design, logos, or text can be printed on the jute roll pieces.

 The printed jute fabric pieces should be washed and dried.

 Sew the cut jute roll pieces together with a heavy-duty sewing machine.
  Attach the handles, buckles, zippers, and so on.

 Pack the jute bags for marketing.

MARKET DEMAND

Here, we can see the demand from past 5 years has been increasing the main is of banning the

plastic bags and the people are interested in using eco-friendly products more after the covid.

Jute Bags Market Outlook- (2022-2032):

The global jute bags are estimated at US$ 1.2Bn in 2022 and is projected to reach US$

1.9Bn by 2032, at a CAGR of 4.9% from 2022 to 2032. According to the study, the

global jutebags market is estimated to generate an incremental opportunity of US$ 783

Mn during the forecast period.

BUSINESS OPPORTUNITIES

 It is essential to select the appropriate market segment for a successful business. The

primary requirements for jute bags must be known.

  Jute is now used to make shopping bags, ladies' vanity bags, purses, and college bags.

 Because the female population is more interested in shopping, jute bags are to be

designed with ladies' fashion in mind first.

 Aside from continuing own jute handbag and purse business, partnering with some

small-scale shops and supplying jute bags to them as carrying bags could be done.

 Jute bags are used in the packaging of many food items that are delivered online.

Hence, such restaurants could be contacted.

SWOT ANALYSIS

Strengths

1. Eco-Friendly products

2. Products with exclusive quality and the cheapest price

3. Skilled manpower with low cost

4. Enough raw material supplies

Weaknesses

1. Capital constraints

2. Jute products are not sustainable like plastic, polypropylene products

Opportunities

1. Provide more greener solution

2. Increasing market demand

Threats

1. Abundance supply of plastic or polypropylene products

2. Political instability

3. Huge competition
 PORTER’S FIVE FORCES MODEL

Jute, the golden fiber, meets all standards for “safe” packaging in view of being a natural,

renewable, biodegradable, and eco-friendly product.

SUPPLIER POWER

 Primarily the suppliers of raw jute to end consumers are farmers in small villages.

They yield comparatively less supplier power because their scale of operation is low

and they have an incentive to switch to growing rice on the same fields. This might

altogether stop the production of jute and create havoc for mill workers and

dependants.

 Supplier power in case of a middleman is reasonably from medium to high. They

perform essential functions like assembling and storing the crop, transporting it to the

secondary market and financing various transactions related to it.

 In cases of the paucity of raw jute for mills they draw a hard bargain in their favour.

BUYER POWER

 The buyers’ power is collectively significant as to mostly the price of jute is set

depending on the demand.

 Of thirty major primary commodities traded internationally, only about six have as

much price and supply instability as jute.

 Jute has lost a major part of its market share to synthetics and therefore demand is

very sensitive to price increases, but not nearly as sensitive to price decreases.

ENTRY BARRIER

 Low profitability due to declining market. Not much research and development have

gone into this sector and therefore, advanced technical know-how is missing.
  Government has been taking active steps to revive the industry by introducing

regulatory measures and prescribing reservation of commodities to be packed in Jute.

 The Government attempts to provide as much reservation as possible to utilize the

jute crop that is produced in the country, without creating the bottle- neck in the

supply-distribution chain of the commodities.

SUBSTITUTES

 The threat of substitutes is very large because jute is mainly used as a fibre in the

production of the end product and there are a number of manmade and natural fibres

that can act as very close substitutes.

 Jute is a flexible packaging material. It faces being substituted by other flexible

packaging materials like plastic; nylon and other manmade fibres and also forms non-

flexible packaging materials – boxes, cartons, and aluminum.

 Latest innovations like modified atmosphere packaging cans, which seal in the air to

retain freshness, or smart materials that can breathe selective gases and keep food

unspoilt.

 Considering that currently all over the world, there is an over capacity of cotton

production and falling demand, downward trend of cotton prices will tend to lower

demand for jute textiles as it is the closest substitute having the same natural appeal.
 COMPETITION

 Low market share causes firm to fight for market share; with synthetic fibre eating up

the major chunk of the market share competition has intensified amongst the rivals

within the industry.

 Low switching costs increase rivalry. When a customer can easily switch from one

product to the other there is a struggle to capture customers; with alternatives to fibre

products that are available at cheaper rates, the switching cost for customers is

significantly low and hence, existing industries must fight for the market share.

 The eco-friendly wave engulfing the public and government supporting use of jute

products investment in this field has become significantly profitable. This has

attracted the attention of new players who are willing to invest in this industry and

thus increase the competition for existing manufacturers.

VALUE CHAIN ANALYSIS

Jute Manufacturers Manufacturers of

Marketing and
producers jute textiles Diversified Distribution
sales
products

 Composite
industries  Jute bags  Importers,  Whole sales
 Small and  Floor covering traders,  Small scale
medium  Wall hangings wholesalers, retailers
industries  Decorative  Exporter  E-Marketing
 Manufactures fabrics companies  Exporters
and exporters  Handicrafts
 FINANCIAL PLAN

A.Fixed Capital

1. Land & Building - Own land(2250 Sq.ft)

2.Plant & Machinery

S.No. Particulars Numbers Rate Total (Rs.)

1 Printing Section:

a) Wooden Printing
2 15000 30000
Table

b) Screen of Diff.
20 400 8000
Design

d) Dye Paste Stirrer 4 3600 14400

e) Water Drum 2 1900 3800

f) Cottage Steamer 1 17500 17500

Total 73700

2 Stitching Section:

a) Lock Stitch
6 5000 30000
Machine

b) Wooden Working
3 3000 9000
Table

c) Cutting Table 2 2000 4000

d) Electric Fittings 6000

e) Scissors, Measuring
3500
tape and other
 Equipments

Total 52500

Total Machinery 126200

3.Furniture & Fixture

Office Furniture like Almirah, table, chair, rack, etc -17500

TOTAL RECURRING EXPENDITURE/FIXED CAPTIAL

1 Land & Development 0

2 Plant & Machinery 126200

3 Furniture & Fixture 17500

Total 143700

WORKING CAPTIAL PER MONTH

Monthly Expenses for Salary & Wages

Sl. Particulars Employee Salary Total (Rs.)

Manager cum-
a. 1 6000 6000
Supervisor

b. Clerk cum-Accountant 1 4000 4000

c. Salesman 2 3500 7000

d. Master Printer/Designer 1 3500 3500

e. Master Cutter 1 3200 3200

h. Stitching Machine 5 2000 10000

 operator

i. Skilled Printer 4 2500 10000

j. Unskilled Worker 4 1500 6000

49700

Add: Perquisite @20% 9940

TOTAL 59640

Raw Material Consumption Per Month

Sl.no Items Total Quantity Rate Total (Rs.)

a. Dye Stuff(in kgs) 25 750 18750

b. Printing Gum(in kgs) 25 70 1750

c. Chemicals & Auxiliaries L.S. 2800

d. Jute Fabric(in mtrs) 8000 10 80000

PVC Buckle or Bamboo

e. 13500 2.5 33750
sticks(pcs)

f. Sewing Thread L.S. 2500

Packing Materials,
g. L.S. 2500
Needle,Label etc.

h.
Transportation 6500 6500

cloth for shopping

i. 2500 30 75000
bags(mts)

TOTAL (Incl. tax) 223550

Monthly Other Expenses

Rate

Tax & insurance 2500

Electricity & utility 3000

Office &administrative expenses 1500

Repair & Maintenance 1000

miscellaneous expenses 1000

sale promotion 1500

Total 10500

TOTAL WORKING CAPTIAL PER MONTH

Raw material consumption 223550

salary & wages 59640

other charges 10500

Total 293690

TOTAL WORKING CAPTIAL FOR 3 MONTHS

Raw material consumption 670650

salary & wages 178920

other charges 31500

Total 881070
TOTAL CAPTIAL INVESTMENT

Fixed capital 143700

Working capital for 1 month 293690

Total 437390

MEANS OF FINANCE

Promoters’ contribution 35% 153086

NCJD'S Interest free loan 20% 87478

Bank Loan 45% 196826

Total 437390

COST OF PRODUCTION PER YEAR

Total Recurring Expenditure 2682600

Depreciation on plant & machinery@15%p.a 18930

Depreciation on Furniture @ 10% p.a. 1750

Interest on total Capital Investment @ 12%

52486
p.a

TOTAL 2755766

TURNOVER PER YEAR

ITEMS QTY RATE TOTAL AMOUNT

jute bags 50000 35 1750000

printed & decorated 20000 60 1200000

designer laptops bags 1200 250 300000

Jute folders 4500 30 135000

Handbags 1000 250 250000

3635000

NET PROFIT PER YEAR

Turnover per year-cost of production per year 879234

Profit ratio on sale 24%

Rate of return 201%

BEP ANALYSIS

Fixed cost RS

Depreciation on Plant & Machinery 18930

Depreciation on Furniture & Fixture 1750

Interest on Total Capital Investment 52486

Tax & Insurance 30000

40% Salary & Wages 286272

40% of other expenses excluding insurance 38400

Total 427838
 CONCLUSION

These Reusable 100% Natural Bags are biodegradable, ethically sourced, eco-friendly,

longlasting. They are a sustainable alternative to plastic and most other gree or Eco-Friendly

types bags available in the market. As well as their stylish looks just bags carry a positive

environmental message about our brand when printed with our logo. Go Plastic bag free and

make a different to our planet. Through the financial plan we can see that only 75% of the

capacity we are using for 3 years later on based on the demand of our we will increase our

production.
 BIBLIOGRAPHY

 (NIIR Board of Consultants & Engineers, 2014)

 (SUKHEN GHOSH)
 (The Complete Book on Jute & Coir Products (with Cultivation & Processing) - 2nd Revised
Edition)
 (JUTE PRODUCTION TECHNOLOGY)