DETAILED PROJECT REPORT

ON

MFRS of. Biodegradable Carry Bags

Submitted to TSIIC Ltd

By:-
AICMT International
Private Limited
PROJECT AT A GLANCE

Name of the Company AICMT INTERNATIONAL PRIVATE

LIMITED
Date of Incorporation 25th June 2021
Constitution Private Limited
CIN U51909TG2021PTC152560
Address for the Communication Bharath’s 63 North, Plot No 63 & 64,
Ground Floor, 3rd Lane, Aditya
Gardens, Near Sai Nagar Main Road
Bachupally , Hyderabad , Telangana
India , 500090
GST No. 36AAVCA3850E1ZI
Name of the Promoters 1. Shaik Shaida Shareef
2. Vijay Chandra Chennupalli
Category General
Mobile No +91 7075500878
Email Id info@aicmtinternational.com
Line of Activity Bio-degradable Carry Bags – 600 MT
(Collobration with DRDO , Technology
Transfer by DRDO)
Proposed Project Location IP_Kondapur Telangana
Plot No. Plot No. 61
Area Required 0.45 Acre
Power Requirement 80 KW
Water Requirement 3 KL Per Day
Project Cost 328.53 Lacs
Means of Finance Equity: 131.41 Lacs & Bank Debt: 197.12 Lacs

Promoters Profiles

Name Mr. Shaik Shaida Shareef

Designation Director & co-Founder
Qualification M.Tech Industrial Engineering and
Management , IIT Kharagpur ,
2006 Passed Out
Residence Address 4-1-1/60 , Bharath Homes, 3rd Lane,
Aditya Gardens, Bachupally
Telangana 500090
PAN BNNPS8299C
Work Experience 15 Years
Net Worth 301.00 Lakhs

Name Mr. Vijay Chandra Chennupalli

Designation Director
Qualification Graduate
Residence Address 4-1/62 , Bharath Homes, 3rd Lane,
Aditya Gardens, Bachupally
Telangana 500090
PAN AGZPC7323H
Work Experience 15 Years
Net Worth 86.00 Lakhs

About AICMT International Private Ltd

AICMT International Private Ltd (DRDO – AICMT) established in June 2021

starting a bio-plastics manufacturing unit to design, develop and manufacture bio-
plastic products to replace consumption of plastic products.

The company with its innovative product line-up has positioned itself very well in
capturing the sustainable new market that is becoming available as result of
replacing plastic both in India and across the globe.

AICMT is setting up the facility to manufacture granules, the key ingredient for
manufacturing downstream products at with a capacity of 50 tons per month. With
the wide spread appreciation of using alternative products to plastic (the usage of
which is currently at 2 lakh tons per day), the demand for AICMT granules and
products is expected to grow at an average annual growth rate of 20-30% till 2025.
The upsurge in usage of bio-plastic products will accelerate at unprecedent rates as
India and other countries commit to replacing plastic at global summits.

The sudden and huge surge in the opportunity and demand for starch-based bio-
plastic products had AICMT exploring collaborations with business partners in
funding the expansion plans.

Collaboration with DRDO

DRDO had come forward to collaborate with AICMT in its R&D efforts for
developing bio-plastic granules and downstream products. The R&D for expanding
the current films and bags category of products and other innovations proposed to be
commercially launched by DRDO – AICMT is underway in a big way at AICMT
facilities in Hyderabad. The partnership between DRDO and AICMT will surely
pave way for pathbreaking innovations and products positioning India as the
pioneering country among the long list of countries that are faced with the challenge
of replacing single use plastic and other plastic products by 2022.

Market Opportunity for DRDO - AICMT

Given the very nature of the product (bio-degradable), DRDO - AICMT had gained
significant amount of attention from central government, state governments,
government and semi-government agencies, business organizations alike.
Government of India had roped in Niti-Aayog to assist and encourage DRDO -
AICMT in scaling up its production capacities and position bio-plastics as an
alternative to plastics.

DRDO - AICMT had identified two key areas for its expansion plans – Multiplying
its upstream granules manufacturing capabilities and expanding the downstream
product manufacturing through multitude of arrangements – Joint Ventures,
Technology transfers, direct partnerships and establishing new distribution network
both in India and outside of India as well in a phased approach.

Multitude of state, central governments and semi-government agencies are coming

forward to collaborate with AICMT in many ways – offering industrial lands for
setting up Greenfield facilities for centralized granules manufacturing in volumes
commensurate to meet the demand. AICMT growth provides attractive options for
investors to participate in an explosive business opportunity in the bio-plastics
market.

DRDO - AICMT Brand Image

DRDO - AICMT promoted by first generation entrepreneurs is in its first year of
operations. Even though the company is small in size and in its operations, DRDO -
AICMT is going to emerge as a brand to reckon with in the bio-plastic market space
for all the right things it has planned to implement. Ever since the product launch of
Bio degradable bags at TTD took place, need for bio-plastics is resonating in all
industry, political circle and in religious organizations. Central government and state
governments are committed to adopting bio-plastic products on a war footing basis
to eliminate single plastic usage by 2022.
DRDO - AICMT is riding high on enhanced awareness to replace plastic primarily
arising because of the increased social consciousness and mandatory guidelines in
the political and industrial fronts. The company’s brand value, as a result, has
increased significantly.

It has now become an overarching moral obligation than a business proposition for
DRDO – AICMT to scale up operations in a short span of time. DRDO – AICMT is
going to leverage the widespread guidance from Niti-Aayog, government and other
private institutions to accelerate its expansion and launch new products.

DRDO - AICMT is exploring variety of options to expand and grow including the
following non-linear models for its growth:

• Development of manufacturing and distribution network for AICMT upstream

granules
• Partnerships and Franchisee models for downstream products
As a first step in this direction, DRDO - AICMT is proposing to enter a
collaboration with investors for manufacturing of biodegradable granules and
downstream products.

Biodegradables – An Introduction
The term “biodegradable” refers to anything or substances that can be degraded by
the natural forces and micro-organisms and Bio-degradable plastics refer to those
plastics that can be decomposed by the microorganisms and also natural factors such
as rain, sunlight, etc. Hence these bags will not pose to be a threat to the
environment. Plastic bags can be made “Oxo-biodegradable” by manufacturing
theme from the normal polyethylene or the polypropylene and then incorporating an
additive that can cause them to degrade and then biodegradation of the polymer by
oxidation.

Fig.: Biodegradable Plastic Bags and PLA pellets

The global production capacity of the biodegradable plastic bags reached around
1.17 million tons in 2019. Polylactic Acid (PLA) based is probably the most well-
known biodegradable plastic but besides that there are about 20 groups of
biodegradable plastic polymers. Of these 20 known biodegradable plastic groups,
only 3 types are produced commercially and those include (i) Starch blends (ii)
PLA; and (iii) Polybutylene based polymers which includes Polybutyl Succinate
(PBS) and Polybutylene Adipate Terephthalate (PBAT) which are both fossil fuel
based.
PLA (Polylactic Acid) is a potential and popular polymer material. It is also called
“Polylactide” and can be produced by the fermentation of renewable sources such
as Corn, Cassava, Potato, and Sugarcane. Other feedstock that have been
researched and explored include Cellulosic Materials, Agricultural Byproducts, and
even greenhouse gases such as Carbon dioxide and Methane. But that technology is
still under development and agricultural by-products set to remain as the main
feedstock for starch blends and PLA in the near future. PLA has excellent
properties as compared to aliphatic polyesters such as high mechanical strength,
high modulus, biodegradability, biocompatibility, bioabsorbability, transparency,
and low toxicity. Because of its excellent properties, PLA has shown potential
applications in different sectors such as agricultural films, biomedical devices,
packaging, and automotive industries. Although PLA is a bio-degradable polymer,
but its complete degradation may take several years. As of 2019, production
capacity of PLA was approximately 290 thousand tons.

The initial production of the biodegradable polymers started in the Europe, the US,
and Japan but the production was soon shifted to different parts of Asia due to the
low cost of the raw materials and the convenience of feedstock acquisition. Many
companies have emerged in China, India, and Thailand that are financed by the
local investors and also companies from the global north.

Market Potential
The global biodegradable market is valued at USD 3.27 billion in 2019 and is
expected to reach USD 6.12 billion by 2023 at a CAGR of 15.1 % from 2020 to
2025. The governments across the world are prohibiting the use of single use plastics
and this coupled with the rising awareness among the people regarding the harm that
the plastics are doing to the Earth are among the key trends that are fueling this
market. Noncompostable plastics are an issue across the globe now and the best way
to deal with it is the manufacture and the use of biodegradable plastics. The market
can be segmented based on material, end-use, and regional outlook.

Based on the material, there can be the following types: Starch-based, PLA-based,
Polybutylene Adipate Terephthalate (PBAT), Polybutylene Succinate (PBS),
Polyhydroxyalkanoate (PHA), and others. Among these types, the Starch-based
bags are set to dominate the market. The segment is poised to expand at a revenue
based CAGR of 10.4% during the same period in terms of revenue. The PLA-based
plastics on the other hand are also another popular category and this is mainly due
to the low-cost of the products.

Based on end use applications, industry verticals include - Packaging, Industrial

sector, Agricultural sector, and others. Among them, the packaging sector
dominates the market as biodegradable plastics are used in both flexible and rigid
packaging. Replacement of conventional plastics by these products in food
packaging such as boxes, wraps, cups, and plates is gaining momentum, which is
supporting the growth of the biodegradable plastic market. In the agricultural
sector, the use of biodegradable mulch film ensures conservation of water in the
soil, suppresses weed growth, and soil temperature maintenance in order to
facilitate faster crop development.
As far the regional outlook is considered, the market can be divided into North
America, Europe, Asia Pacific region, and the rest of the world. Among the above
regions, the highest market share in the biodegradable plastics market is hold by
Europe since 2019. In the Asia- Pacific region as well, the market is expected to
emerge as the fastest growing market.

Key Players
The major names in the biodegradable plastics market are: BASF SE, NatureWorks
LLC, Mitsubishi Chemical Corporation, Carbion, and Biome Technologies plc. On
the global scale, the American company NatureWorks leads the PLA sector,
operating a manufacturing facility in Midwestern state of Nebraska with a
production capacity of 150,000 tons. They use crops that grow within 50 miles of
their US production capacity. Total Corbion PLA operates the world’s second
largest PLA plant in Rayong, Thailand. The plant was opened in 2019, with an
annual capacity of 75,000 tons, using non-Ithe company announced, the company
announced its plan for a second PLA plant based in Grandpuits, France, with an
annual capacity of 100,000 tons. The remaining major PLA producers are mainly
from China and most of the companies are small scale companies with a fairly
small production capacity of 10, 000 – 50, 000 tons per year.

Jiangsu Yunyoucheng operates the largest PLA plant in China, with an annual
capacity of 50,000 tons.

In India too, there is a high demand for bio-degradable plastics and our country has a
huge amount of bio-mass required for their production. Quite a few manufacturing
firms like Envigreen, Ecolife, Plastobags, Earthsoul India and Truegreen have come
up with different forms of bioplastics, which are already supplying these
environment friendly forms of plastics in regional markets.

Truegreen is a firm based out of Ahmedabad that started the manufacturing plant
with a production capacity of 5000 MT per year. Ecolife is a firm based out of
Chennai that manufactures biodegradable for industrial purposes. Bengaluru based
firm Envigreen which is the latest startup to enter the Indian bioplastics market has
a production capacity of upto 1000 Tons bioplastics per year.

Indian Standards
IS 17088-2008 lays down the Specifications for “compostable plastics” specifying
the procedures and requirements for the identification and labelling of plastics, and
products made from plastics, that are suitable for recovery through aerobic
composting.

Biodegradable Products
Product Uses
The uses of the biodegradable plastics can be listed as follows:
• The manufacturing of the compostable bags is the primary sector of application
of the Biodegradable plastics. These bags can be used as grocery carrying, Food
Storage, Garbage bags,
• Packaging is another important sector of application of the biodegradable plastics
and accounted for 59 % of the biodegradable plastics made in 2019. Flexible
packaging requires almost 500, 000 tons of biodegradable plastics.
• The second area is the agricultural and the horticultural sector that used 14 % of
the biodegradable plastics manufactured in 2019. Agricultural mulching film is
used to improve crop yield in many countries.
• They are also used as consumer goods in different areas.

Raw Material
The raw materials required to produce starch blends is corn starch and PLA plastics
are Polylactic Acid or Polylactic Acid Blends. These are available in the form of
granules, in various grades, for the use by the plastic convertors. PLA is a polymer
of Lactic Acid, which is a natural acid produced by the fermentation of sugars or
starch with the help of micro-organisms. The PLA formed from the starch, or the
sugar is incapable of being used as plastics and hence the raw PLA is compounded
by mixing it with other substances or by co-polymerization or it is blended with
other plastics to enhance its properties.

Besides this, certain additives are also added to the PLA blends that include UV
stabilizers, impact resistance modifiers, plasticizers, color pigments.

Manufacturing Process
The production process for starch and PLA plastic blends are as follows:
• A “polymer” becomes plastic only when they are correctly adapted to the specific
application by compounding. Compounding means preparing for use and
describes the enhancing process that raw plastics go through, being blended with
certain additives (e. g. fillers or other additives) to optimize their properties for
 the planned application. Such aids can be processing aids, UV stabilizers, impact
resistance modifiers, plasticizers, color pigments, and many other things.

• Compounding can be done in a mixing vessel. Here the components that are
added to the PLA blends are mixed and homogenized.
• The PLA blends are loaded into the hopper of a Plastic extrusion machine, and it
conveyed to the rotating screw of the machine.
• In the extruder, the PLA blends are heated to a particular temperature and then
diversified. When the plastic within container is heated it becomes a melt, it can
be extruded and then blown up with the help of circular die to give an inflated
plastic sheet.
• The inflated sheet of plastic is blown up vertically to a high level that further
allows the material, a proper distribution and provides the required cooling time
before the plastic film is flattened.
• The final step in the manufacturing process is to send the inflated sheet through a
section of nip rollers to make the film flat and later roll the film into large cores.
By altering the speed of the nip rolls, the bubble-like formation can change its
measurement and thickness of the film.
• Following the extrusion process, the large coil of plastic films enters the
converting department where the film roll is fed into an unwinder, where it’s
subsequently converted to the plastic bags. The plastic roll is treated with an
electrostatic wave of current where it starts to unwind. This is an “Optional” step
and is carried out to appropriately prepare the film for the printing process, where
the plastic bags are printed with logos and messages.
• Either after the printing process or after the extrusion process, depending on
weather any printing is done, the film is cut into the correct dimensions with hot
knives that seal the ends of the bags together at the same time.
• After the cutting and the sealing process, any material that is “scrap” is reused
again in the manufacturing process to minimize any waste material.

• After this process, the plastic bags are packed in large bundles and then stored for
dispatch.

Yield of the Product / Production Ratio

The annual production capacity of this biodegradable plant can be something
between 600 MT per annum.
1st 2nd 3rd 4th 5th
S No Name of the Product Year Year Year Year Year
1 Biodegradable Carry Bags 600 MT 660 MT 720 MT 800 MT 880 MT

REVENUE ANALYSIS
 2nd 3rd
S No Name of the Product 1st Year Year Year 4th Year 5th Year
Rs. In Lacs
1 Biodegradable Carry Bags 1560.00 1716.00 1887.60 2076.36 2284.00

List of Proposed Machineries

S.No Name of the Machinery Qty (No’s) Cost in Lacs

1 Plastic Extruder Machine 1 80.00
2 Blow Film Machine 1 12.00
3 Plastic Bag Printing Machine 1 8.00
4 BAG Cutting Machine 2 8.00
5 Sealing Machine 1 5.00
TOTAL 6 113.00

Plant & Machinery

The following machineries would be required for the manufacture of the
Biodegradable Plastic Bag manufacturing plant:

A vertical mixing equipment for the mixing of the starch

blends and PLA with other additives. The raw material is
loaded through the hopper and thereby it is sucked up into
the mixer. The outlet is connected to the extruding
machine. This is generally made from mild steel and the
power consumption is somewhere between 8 – 14 HP for
the mixing 100 – 500 Kg starch & PLA granules.

Plastic Extruder & Blow Film Machine

 The mixed starch & PLA blend is melted and shaped into
the plastic bags in the extrusion machine, converting the
solid plastic pellets into a uniform polymer melt. The
power consumption can be anywhere between 30 - 50 kW
depending upon the quantity of the input.
Plastic bags printing machine

After the plastic pellets are converted into the plastic rolls

in the extrusion machine, they are printed using the plastic

bag printing machine.

Bag cutting and sealing machine

After the bags have been printed, they are cut, and
their ends are sealed with a plastic cutting and sealing
machine. This machine may come along with
conveyor belts as well.

UTILITIES REQUIRED

Power Requirements
The machinery in a biodegradable manufacturing plant will need a 3 phase AC 90
KW power supply.
Water: The estimated water requirement is 3 KL / day.

Manpower Requirement

Description Nos Salary PM Total Salary

Production 1 40000 40000
Quality 1 30000 30000
Testing 1 30000 30000
Unskilled 9 15000 135000
Plant 1 100000 100000
Warehouse 1 30000 30000
Admin 2 25000 50000
Sales 4 15000 60000
Total Estimated Manpower 20 285000 475000

The total manpower required for the operation of the plant, including skilled,
unskilled, supervisory, admin and sales & marketing resources is estimated to be
about 20.

PROJECT TIMELINES

Tentative months to
S No Description
complete

1 Land Allotment and Payment 1

2 Agreement of Deed 1
Financial Approvals & Statutory
3 1
Approvals
5 Civil Works- Buildings 6
 6 Procure of Machines 1
7 Manpower 1
8 Trial Runs 15 Days
9 Final Commercial Production 15 Days
Total 12 Months

Licenses & Approvals

To start the biodegradable plastic bag manufacturing process the different licenses
and registrations from the different authorities regarding the area and machineries
must be obtained initially.

JUSTIFICATION FOR THE EXTENT OF LAND REQUIRED FOR THE

PROPOSED PROJECT

Plot No: 61

Locations: IP_Kondapur, Medak Dist

Total Land Required: 0.45 Acre

Total Land in Sq Meters: 1820

We request TSIIC Ltd, Hyderabad to allot us a suitable land with respect to our proposal to
set up the NEW establishment.

We propose that the new establishment in 0.45 Acres. Location benefits for the request on
location are:

1. Skilled manpower at reach, employees reside nearby to proposed plant.

2. Most of customers are overseas clients coming from various global destinations. This
location gives our Clients access to reach from the Hyderabad International Airport.

Hyderabad, being one of the major hub for the industrial advancements, connects to all
major cities in India through rail, road and air. Also Hyderabad International Airport
(Rajiv Gandhi International Airport) provides connectivity to major international
destinations.
Total Area in
S No Description %
Sq.Mt

1 PROPOSED SHED 345.79 19.00%

2 RAW MATERIAL STORAGE AREA 105.70 5.81%
FINISHED PRODUCTS STORAGE
3 211.40 11.62%
AREA
4 SECURITY ROOM 9.00 0.49%
5 WATER SUMP 9.00 0.49%
6 OFFICE BUILDING 45.00 2.47%
7 TOILETS 15.00 0.82%
8 STORES 15.00 0.82%
9 DG ROOM 9.00 0.49%
10 TRANSFORMER 9.00 0.49%
11 ELECTRICAL PANEL 9.00 0.49%
12 ROADS AREA 182.00 10.00%
13 PARKING AREA 363.10 19.95%
14 GREENERY AREA 180.80 9.93%
15 SETBACKS 311.21 17.10%
Total 1820.00 100.00%
 PROJECT COST AND RETURNS
Promoter intends to set up a biodegradable granules and downstream product
manufacturing unit with an estimated capacity of 50 MT per month.

Project cost Amount in Lakhs %

Land & Site Development 73.26 22.30%
Building and Construction Cost 78.49 23.89%
Proposed Plant & Machinery 113.00 34.40%
Other Infrastructure Cost 5.00 1.52%
Contingency Expenses 1.88 0.57%
Pre-Operative Expenses 2.90 0.88%
Working Capital 54.00 16.44%
Total Project Cost 328.53 100%

Detailed Summary to the Proposed Project Cost

Land Cost

Land Cost Amount in Lakhs

Land & Site Development (1820 Sq. Meter x Rs.4025) 73.26

Civil Works & Buildings

Total Area Total Area in

S No Description Total Cost
in Sq.Mt Sq.Ft

1 PROPOSED SHED 345.79 3720.70 37,28,142

 RAW MATERIAL STORAGE
2 105.70 1137.33 11,39,607
AREA

FINISHED PRODUCTS
3 211.40 2274.66 22,79,213
STORAGE AREA

4 SECURITY ROOM 9.00 96.84 27,890

5 WATER SUMP 9.00 96.84 27,890
6 OFFICE BUILDING 45.00 484.20 1,39,450
7 TOILETS 15.00 161.40 1,81,091
8 STORES 15.00 161.40 46,483
9 DG ROOM 9.00 96.84 27,890
10 TRANSFORMER 9.00 96.84 27,890
11 ELECTRICAL PANEL 9.00 96.84 27,890
12 ROADS AREA 182.00 1958.32 42,104
13 PARKING AREA 363.10 3906.96 62,511
14 GREENERY AREA 180.80 1945.41 31,127
15 SETBACKS 311.21 3348.62 60,275
Total 1820.00 19583.20 78,49,452

MEANS OF FINANCE - Sources of Funds Flow:

1) The Directors and Shareholders have the Capacity of funding 40% of the
proposed project cost from their own pocket. This is about Rs.131.41 Lakhs.

2) The company would be approaching Banks / Financial Institutions for the rest of
project cost funding (60%). The collateral that will be offered for the Loan would be
the Land, Building & Plant & Machinery and Directors/shareholders Properties.
This is about Rs.197.12 Lakhs as Term Loan and Cash Credits.

SWOT Analysis
Strengths: On one hand when plastics take somewhere between 20 to 500 years for
their degradation, Biodegradable plastics can be degraded by the natural forces
within 5 years which is a major advantage over the normal plastics. The issue of
Global Warming and rising levels of pollution are also spreading awareness among
the people thus motivating them to use the biodegradable variety.

Another major advantage of the biodegradable plastic bag manufacturing is the fact
that the raw materials are not sourced from petroleum.

Weaknesses: Despite several environmental advantages, the Biodegradable have a

range of shortcomings too. Segregation of the plastics and the biodegradable plastics
is a major drawback as they look very similar. Moreover, they take a long amount of
time to get decomposed and some of them even do not degrade under normal
conditions and specified conditions are required for their degradation. Some of the
biodegradable plastics release greenhouse gases during decomposition, which is
counterproductive to the environmental cause, thus restraining the market growth.

Opportunities: With the rising awareness among the people regarding the different
environmental concerns, the biodegradable plastics are to find a huge market and
hence market in the near future.

Threats: The major threat to the market is the fact that the PLA bags take a lot of
time to decompose which might lead ways to other faster degrading materials.

PROPOSED LAYOUT