Contents

Contents.............................................................................................1 About Paper bags.............................................................................1 Market potential.................................................................................2 Projected annual financials in a nutshell........................................2 Basis & Presumption........................................................................3 Production Process (An Overview).................................................4 Quality Control & Standards............................................................5 Land & Building (rental)...................................................................5 Machineries & Equipments..............................................................5 Raw Materials (Per Month)...............................................................6 Other Expenditure (Per Month)........................................................7 Staff and Labors (Per Month)...........................................................7 Working Capital (per Month)............................................................8 Total Capital Investment...................................................................8 Cost of Production (Per Annum).....................................................9 Total Sales (Per Annum)...................................................................9 Profitability (Per Annum)..................................................................9 Break Even Analysis (Per Annum)................................................10 A) Fixed Cost...................................................................................10

About Paper bags

Did you know that it is possible to produce a bag that is as durable and cheap as a plastic bag is, yet without harming the environment? In these days of heightened environment concerns, where even the slightest damage to the environment is banned by legislation, it makes good business sense to remain ecologically-friendly There are paper bags that can hold up to 20 kgs of weight without getting torn bags that are made of paper material called sarc-kraft can withstand such weight. Contrary to popular misconception, paper

Project report on manufacture of Paper-bags bags can compete with any kind of plastic bag in terms of all features. Paper bags can thus cater to any kind of conceivably end-use

Market potential
Just consider the sheer size of the existing market for plastic carry bags. It amounts to 600 billion bags. Many governments today are increasingly becoming environment-sensitive and at least project themselves to be so. Big business too wants to be seen as ecofriendly. Several local government bodies such as city municipal corporations and town-planning bodies have banned usage of plastic bags. In fact in all hill stations in India, the use of plastic bags has been banned. That day when consumers and business entities may have no option but to start using paper bags instead of plastic bags is not far off. The market size for paper bags, in a single hill station like Nilgiris (Ootacamund) in Southern India conservatively amounts to 10 million bags

Projected annual financials in a nutshell

Sales revenue Less: Raw-material cost Labor cost Power & Administration Other overheads 41.40 24.57 3.72 Rs in lakhs 2.40 2.48 33.16 Tao-media Page 2 of 10 Cash profit 8.24

Project report on manufacture of Paper-bags

Basis & Presumption

The Production capacity is based on machines installed and congenial working conditions available. The cost of machinery, raw materials labor etc. or based on the local market. Single shift working at 8 hours shift is presumed. 1. The estimate are drawn for a production capacity generally considered techno-economically viable for model type of manufacturing activity Tao-media Page 3 of 10

Project report on manufacture of Paper-bags

2. The information supplied is based on a standard type of manufacturing activity utilizing conventional techniques of production at optimum levels of performance.

3. Costs in respect of land and building, machinery and equipment, raw materials and the selling price of the finished products etc. are those generally obtaining at the time of preparation of the project profiles and may vary depending upon various factors.

Production Process (An Overview)

Paper Carry Bag Manufacturing process depends upon the volume and weight of the Products to be carried. Accordingly we have to use various kinds of Papers with different GSMs and the Bursting Strengths. We can produce paper carry bags to hold up to 20Kgs. Paper fed into the machine in roll form. In the first bags gets printed with the online paper flexo printing unit attached with the machine. After the printing the paper goes through the chamber in which Different size of width forming, gazette forming, length forming dies, gear wheels. Stereo wheels and knives are used to fold and shape the bags into required sizes Brass gum tank is used for Adhesion. Ultimately it comes to the Bag counting unit and gets counted then stacked together.

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Project report on manufacture of Paper-bags

Kraft , Duplex, Art, Butter, Wax coated, Poly sprayed paper all can be used in roll form up to 220 GSM & B.F. up to 40.

Quality Control & Standards

In the beginning Kraft Paper can be used for Paper Carry Bag Manufacturing process. 100 t0 200 Grams Per Square Meter paper and the 16 to 30 Bursting strength is the common and standard one. The printing, proper Adhesion and the Punching of the Eyelets has to be taken care and inspected in the finished products

Land & Building (rental)

Covered area of 800 Sq.Feet is rented at Rs. 5000.00

Machineries & Equipments

1. Automatic Paper Carry Bag Machineries with following accessories. a) b) c) d) e) Different Size of width forming dies Bottom/side gazette forming dies Length forming gear wheels and stereo wheels Brass gum tank bag counting unit Rs.6, 75,000.00

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Project report on manufacture of Paper-bags

2. Eyelet Punching Machine 3. D Handle Cutting Hydraulic Machine

Rs. 11,500.00 Rs.19,800.00

4. Transport, Erection & Installation charges 10% Rs.47, 675.00 -------------------Total Rs. 7, 06,300.00 --------------------

Raw Materials (Per Month)

1. Kraft Papers 2. Eyelet Buttons 3. Cotton Ropes 4. Adhesive 5. Printing Ink 5 Tonnes 55 Kgs. 500 Kgs. 2 Tonnes -Rs.1, 00, 000.00 - Rs. - Rs. - Rs. - Rs. 29, 700.00 50, 000.00 12, 500.00

12, 500.00 ____________ Rs. 2, 04, 700.00 ____________

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Project report on manufacture of Paper-bags

Other Expenditure (Per Month)

1. Power, Light and Water 2. Repairs and Renewals 3. Postage & Stationery 4. Travel & Conveyance 5. Advertisements 6. Packing & Forwarding 7. Rent 8. Telephone - Rs. - Rs. - Rs. - Rs. - Rs. - Rs. - Rs. - Rs. Rs. 4, 500.00 500.00 1, 000.00 1, 000.00 4, 000.00 2, 000.00 5, 000.00 2, 000.00 ___________ 20, 000.00 ___________

Staff and Labors (Per Month)

Designation 1. 2. 3. 4. 5. Manager / Marketing Supervisor Foreman (Skilled Worker) Unskilled labors Watch Man Nos. 1 1 1 10 1 Salary Rs. 4,500.00 Rs. 3,500.00 Rs. 3,500.00 Rs.18,000.00 Rs. 1,500.00 __________ Rs. 31,000.00 __________ Page 7 of 10

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Project report on manufacture of Paper-bags

Working Capital (per Month)

1. 2. 3. Raw Materials Other Expenses Salary and Wages Rs.2, 04,700.00 Rs. Rs. 20,000.00 31,000.00

_____________ Rs. 2, 55,700. 00 _____________

Total Capital Investment

1. Machinery & Equipment 2. Working Capital for 3Months Rs. 5, 08,950.00 Rs. 7, 67,100.00 ____________ Rs.12, 61,200.00 ____________

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Project report on manufacture of Paper-bags

Cost of Production (Per Annum)

Working Capital per Annum Depreciation on Machinery @ 25% Interest on Total Investment @ 15%

Rs.30, 68,400. 00 Rs. 1, 31,106.00 Rs. 1, 17,018.00 ___________ Rs. 33,16,524.00 ___________

Total Sales (Per Annum)

Item Kraft Paper Bags Qty. 18, 00,000.00 Rate Value

Rs.2.30 (each) Rs.41, 40,000.00

Profitability (Per Annum)

Total Sales Rs.41, 40,000.00 Profit Percentage on Sales Cost of Production - Rs.33,16,524.00 = Profit = 8,23,476.00

- Rs.8,23,476.00 /33, 16,524.00 =25%

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Project report on manufacture of Paper-bags

Break Even Analysis (Per Annum)

A) Fixed Cost
Rent Salary & Wages 40% Other Expenses Depreciation on Machinery Rs. 60,000.00 Rs. 1, 48,800.00 Rs. 96,000.00

Rs. 1, 31,106.00 Rs. 1, 17,018.00 ___________ 5, 52, 924.00 ___________

Interest on Capital Invstmt. Total Rs.

B) Break even Point

B.E.P. =Fixed Cost / (Fixed Cost + Profit)

=Rs.5, 52,924.00 /Rs.5, 52,924.00 +Rs.8, 23,476.00 = 40% ****************

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