Twister Plastic Pvt. Ltd. Feasibility Report

Twister
Plastic Pvt.
Ltd.
Fantastic 4 Group
Twister Plastic Pvt. Limited
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Feasibility report on
IUB
Submitted to:
Sir Adeel Akhtar
Submitted by:
Muhammad Aamir
14
Muhammad Umer Shehzad
41
Imran Ali 44
Umer Arshad
74
M.COM (MOR) 4 SEM FINANCE
TH
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DECLARATION
We hereby declare that the work done in the feasibility report entitled Twister Plastic Pvt.
Limited has been written out by us under the supervision of Lecturer Sir Adeel Akhtar. We also
hereby declare that this report has not been submitted for any degree elsewhere.
Fantastic 4 Group
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ACKNOWLEDGMENT
Countless thanks to Almighty ALLAH, the Lord of the whole universe and the greatest force
behind success in our life.
We bow our head before ALLAH Almighty, who blessed us with potential and stamina to
complete our project report. First of all we would like to pay our special regards and thanks to
respected teacher Sir Adeel Akhtar who provide us guidance at each and every step in the
completion of this report. We are especially thankful to those personalities who help us for the
preparation of this report.
Fantastic 4 Group
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Contributing our efforts to the

welfare of Islam & human beings.
Fantastic 4 Group
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Executive Summary
Project
This proposed project is undertaken to establish a PVC Pipes manufacturing unit at the site of
Small Industrial Area Bahawalpur. There is currently high demand for PVC Pipes in the market.
To fulfill the gap of supply and demand in the market we are going to set up a new PVC Pipes
manufacturing unit. The plant shall be furnished with latest foreign technology and machinery.
Annual capacity of plant will be 1,800 tones at 75% capacity first year and after that plant will
work on 80% capacity. Working of plant will be 300 days in a year and tripled shifts per day 8
hours each. Four types of basic products will be manufactured 3, 4, 6, 12 inches diameters
products.
UPVC Fittings UPVC Fittings ASTM D-2466 (Sch. 40 and 80)
UPVC Pipes as per (ASTM) UPVC pipes (ASTM D-1785 Sch. 40, 80 and D-2241
SDR SERIES)
UPVC Pipes as per (BS-3505/PS-3051) UPVC Pressure Pipes (Class B, C, D & E)
CPVC Pipes For Hot water (ASTM F-441 Sch. 40 and 80)
CPVC Fittings CPVC Fittings
Well Casing Pipes Well Casing Pipes (PS 3505) (PS 3051) (Class B, C, D & E)
Location and Site

The location of unit is Bahawalpur. Site for the PVC Pipes manufacturing unit is the Small
Industrial Area Bahawalpur. All the physical facilities and plant installation will be at that site.
Sponsors
There are four sponsors of the project. Mr. Muhammad Aamir , Mr. M. Umer, Mr. Imran Ali
and Mr. Umer Arshad. They are only the sponsors of the PVC Pipes manufacturing unit.
Market and demand capacity
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The serving place and market for the project unit is Bahawalpur. It is selected because all the cities
are surrounding and it is in the center of these surrounding cities. The distribution will be more
convenience. And the capacity of the unit is 1,800 tones production in a year and it will work on
75% capacity level at first year then in the coming years the capacity will be enhanced to 80%.
Material and inputs

There are two major inputs which are used in the production of PVC Pipes. One is Raisin and other
is Engro chemical steplizer. These materials are in 25kg bags and really high cost materials.
Project engineering
Different types of machineries are used in the production process. CMAT machine imported from
USA, Mixer machine, die machine, boiler and compressors are purchased from local market.
Man power
Man power is very important factor. Man power of Twister Plastics Pvt. Ltd is 12 plant workers, 4
machine operators and helpers and 1 is the plant manager. All the workers are very skilled and
experienced.
Implementation Schedule
The projected was started from 1 June, 2012. Through the difference phases of project
development the project will be in the operation process on 1 Jan, 2013 INSHALLAH.
Cost of project
Total estimated cost of the project is Rs. 62 million in which Rs. 49.4 million is fixed cost
estimated and Rs. 12.6 million is the estimated variable cost of the project.
Financial Plan
The financial plan is very important for the project decisions. It shows the debt and equity ratio of
the project. The financial plan of Twister Plastics Pvt. Ltd is very simple and straight forward
which is 80: 20 debt and equity ratio.
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Financial assistance
Financial assistance is taken from MCB, HBl and NBP at the rate of 21% interest rate.
Operating result
There are certain selected operating results for the unit. (000)
2013 2014 2015
Sales Revenue 251,424 294,641 297,734

Gross profit 63,826 74,068 74,746
Operating profit 40,096 46,953 47,019
Profit before workers fund 35,039 42,362 42,894
Net profit 26,275 32,040 32,348
Financial position of business(000)

2013 2014 2015
Total Current 53,16 80,14
Assets 8 7 93,212
Total
noncurrent 54,26 59,07
assets 9 3 63,877
Total current 22,17 25,02
liabilities 7 5 13,651
Total Long 27,94 24,83
Term Debt 0 5 21,730
57,32 89,36
Total Equity 0 0 121,708
Economic indicators
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There will be employment to the community. The peoples will have benefits due to the
establishment of the unit. Living standard of peoples will be increased. Infrastructure
improvements and other social benefits. The unit will also participate in the national economy as
well.
Terms and conditions

There may be some problems for the community. Pollution problem, sewerage problem and other
chemical usage and smell problem may arise. There will be some steps taken to control these
problems. Certain hurdles were also there during the project completion. In the data gathering there
was the big hurdle. There was no proper data or information available for the project. To get
relevant data process was time consuming. Much problem to find out the exact fact and figures
about the PVC Pipes. Target peoples were not much educated to get information from them was
big issue. The project development each phase is very time consuming and required high skills.
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Table of Content:
Introduction to Project...............................................................................................13
Market and Demand Analysis of PVC Pipes................................................................17
WHAT IS PVC?........................................................................................................17
Different Properties of PVC.....................................................................................17
Products....................................................................................................................18
UPVC Fittings UPVC Fittings ASTM D-2466 (Sch. 40 and 80) ..................................18
UPVC Pipes as per (BS-3505/PS-3051) UPVC Pressure Pipes (Class B, C, D & E) .....19
CPVC Pipes For Hot water (ASTM F-441 Sch. 40 and 80) ........................................19
UPVC Fittings UPVC Fittings ASTM D-2466 (Sch. 40 and 80) ..................................20
UPVC Pressure Fittings UPVC Pressure Fittings ......................................................20
CPVC Fittings CPVC Fittings ...................................................................................20
Well Casing Pipes Well Casing Pipes (PS 3505) (PS 3051) (Class B, C, D & E) .........21
Poly Vinyl Chloride Pipes........................................................................................21
GLOBAL MARKET OF PVC...........................................................................................22
Market of Pipe Industry in Pakistan.........................................................................22
PVC Growth Potential in Pakistan...........................................................................23
Technical Analysis.....................................................................................................26
Location of the Project...........................................................................................26
Manufacturing Process...........................................................................................26
Raw Material.......................................................................................................... 26
PRODUCTION CAPACITY.........................................................................................27
Financial Analysis......................................................................................................29
ASSUMPTION UNDERLYING EARNING FORECAST....................................................32
Assumptions:-........................................................................................................ 45
Economical Analysis.................................................................................................47
INITIAL IMPACT.......................................................................................................47
EMPLOYMENT OPPORTUNITIES...............................................................................48
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BENEFIT COST ANALYSIS........................................................................................48

Ecological Analysis.................................................................................................... 50
LEAD FREE PVC PIPE...............................................................................................50
Storage & Handling ...............................................................................................51
Safety.................................................................................................................... 52
............................................................................................................................. 52
Project Limitations................................................................................................. 53
Suggestions........................................................................................................... 54
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Introduction to Project
Project was started from 1 June, 2012. This proposed project is undertaken to establish a PVC
Pipes manufacturing unit at the site of Small Industrial Area Bahawalpur. There is currently high
demand for PVC Pipes in the market. To fulfill the gap of supply and demand in the market we are
going to set up a new PVC Pipes manufacturing unit. The plant shall be furnished with latest
foreign technology and machinery. Annual capacity of plant will be 1,800 tones at 75% capacity
first year and after that plant will work on 80% capacity. Working of plant will be 300 days in a
year and tripled shifts per day 8 hours each.
Total cost of project is estimated Rs. 62 million. The proposed project is financed by Debt and
Equity in the ratios of 80: 20 respectively. This total Cost of the project comprises of Fixed Assets
Rs. 49.4 million and Initial Net Working Capital of Rs. 12.6 million.
The project is financed by long term loan up to Rs. 12.4 million and the remaining cost of the
project will be financed by the sponsor's share capital of Rs. 49.6 million. There are four sponsors
of the proposed project Mr. Muhammad Aamir, Mr. M. Umer, Mr. Imran Ali and Mr. Umer
Arshad & loan is taken at 21% of interest rate.
The capacity of the unit is 1,800 tones production at 75% in first year and in the coming years it
will increase to 1,920 tones as 80% capacity. There is much gap is available in the market to fulfill
the gap unit will produce and sell certain level of production and try avail the opportunity and get
maximum benefits.
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Gantt chart is used to give the sequence of the activities with the time distribution of the project.
Project sanction 1month ....

Start from 1 May 2011
Civil works 3 months .
Training 2months ...
Machine of site 15days
Installation and erection ....

1month
Plant commissioning 1month
Commercial operation
15days
There are certain Government rules and policies about the PVC pipes. Some should be taken to
make society pollution free and make the environment pleasant. Government has restricted to use
the danger chemicals. Use the chemicals which are good for the safety of environment. Make
proper community safety system.
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The target markets of the PVC pipes unit are all the plastic and iron material retailers and
distributors. Retailers of Bahawalpur and all surrounding cities like Multan, Sahiwal,
Bahawalnagar, Rahim yar Khan, Chishtian, Lahore. These all cities are come in the target market
of the unit. It has a very big market and has more future demand potential. Company will use there
own distribution channels and local channels to make easy and convenience availability of the
PVC pipes.
There are certain promoters of the Twister Plastics. It will have marketing staff, selling staff,
advertisement strategies and local media channels for the promotion purpose. In the start
companies staff and management they promote the company through brushers, cards and personal
marketing.
The project is financed by the sponsors and financial institutions. The fund which is received
through both sources is allocated to the fixed assets and current assets of the company. Fixed assets
are 54,269 is allocated from total assets 107,437 and current assets are 53,168.
The corporate set up is the partnership. There is partnership deed between four members Mr.
Muhammad Aamir , Mr. M. Umer, Mr. Imran Ali and Mr. Umer Arshad. They invest with
equal proportion and also share the loss and profits with equal ratios. All the terms and conditions
are negotiated between them. They all equally participate in management. They all are responsible
for decisions of the company. They also are the management of Twister Plastics Pvt. Limited.
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Market and Demand Analysis of PVC Pipes
WHAT IS PVC?
Polyvinyl chloride, PVC commonly known as vinyl is 2nd most sought after thermoplastic. It
is a chlorinated hydrocarbon polymer - its basic building blocks are chlorine, carbon and hydrogen.
While most plastics are made mostly of petroleum, only 40 percent of the PVC molecule comes
from petroleum; 60 percent of it is chlorine, from salt, NaCl.
PVC is used for producing high quality leakage free pipelines for conveying water, sewerage or
effluent, insulating material for electric cables in construction industry, covering for floors, Door &
Window Profiles, Toys, Food packaging, Furniture, Automobile industry, Electronics, Medical
usage and shoe manufacturing industry.
Different Properties of PVC
Thermoplastic
Lightweight, toughness and durability
Low thermal conductivity
Good insulation properties
Variety of Colors
Corrosion and abrasion resistance
Weather ability
Fire retardant properties
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Products
TWISTER UPVC Fittings available in sizes from to 12, produced in-house and also arranged
through imports are meant for connections in potable water supply, pressure systems,
sewerage, drainage, housing, industrial, chemical effluents and others. Colors: White and Grey.
UPVC Pipes as per (ASTM) UPVC pipes (ASTM D-1785 Sch. 40, 80 and D-2241 SDR
SERIES)
TWISTER UPVC pipes according to ASTM D-1785 (SCH-40 & 80, and D-2241 SDR Series)
have excellent chemical resistance across their operating temperature range, with a broad band
of operating pressures. Due to their long term strength characteristics, high stiffness and cost
effectiveness TWISTER UPVC systems accounts for a large proportion of piping installation, such
as for potable water supply / conveyance, pressure systems, sewerage, drainage, housing, industrial
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and chemical effluents. TWISTER UPVC pipes are available in diameters from to 24" in
standard length of 6 meters in white colors.
UPVC Pipes as per (BS-3505/PS-3051) UPVC Pressure Pipes (Class B, C, D & E)
TWISTER PVC pressure pipes according to specification PS-3051 (BS-3505) are capable
of withstanding under extreme pressure. These pipes are meant for conveyance and distribution of
potable water, sewerage, irrigation, agriculture, under ground fire fighting lines, industrial effluents
and other applications. Pipes classified in Class B, C, D & E according to their pressure rating and
wall thickness are available in diameters from to 24" in standard lengths of 4 and 6 meters.
Color: Grey & Blue.
CPVC Pipes For Hot water (ASTM F-441 Sch. 40 and 80)
Twister PVC pipes according to ASTM F-441 (SCH 40 & 80) produced from a specialized blend
of polymers with a higher class transition point. The Application of PVC pipes include conveyance
of hot water from geyser to end use, chemical, industrial and all kind of hot water distribution for
temperatures up to 93 C. The pipes range starts in diameters from to 12" in standard lengths of
6 meters. Color: Grey.
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TWISTER UPVC Fittings available in sizes from to 12, produced in-house and also arranged
through imports are meant for connections in potable water supply, pressure systems,
sewerage, drainage, housing, industrial, chemical effluents and others. Colors: White and Grey.
UPVC Pressure Fittings UPVC Pressure Fittings
uPVC Pressure Fittings available in sizes from to 24 (imported), for pressure applications in
Industries, chemical plants, R.O. plant, pressure water supply, and pump houses. Color: Grey.
CPVC Fittings CPVC Fittings
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TWISTER CPVC Fittings available in sizes from to 8, produced in-house and

arranged through imports are mainly meant for potable hot water distribution for temperatures up
to 93 C, besides there are several other chemical & industrial applications on elevated
temperatures within defined recommendation. Color: Grey.
Well Casing Pipes Well Casing Pipes (PS 3505) (PS 3051) (Class B, C, D & E)
TWISTER Well Casing / Steiners / Slotted or Perforated / Screen pipes, are produced from UPVC
pressure pipes according to PS-3051 (BS-3505), The applications of these pipes include , wells,
boring, canals, rivers, roadside drainage, playgrounds and others, Available in Class B, C, D & E
in pipe diameters from 3 to 24" in standard lengths of 4 and 6 meters. Color: Grey / Blue.
Poly Vinyl Chloride Pipes
PVC is a versatile material for piping and has replaced conventional pipes made from conventional
materials such as Galvanized Iron (GI), Cast Iron, Asbestos Cement and Concrete Cement. Its
compatibility with most fluids, lower cost of material handling and installation, unique
combination of properties and availability of highly reliable jointing system makes it an excellent
competitor in the piping world, resulting in a product that is a viable competitor to pipes made
from other materials in dimensions up to 20 inches.
The PVC pipe manufacturing industry has presence in all major industrial cities of Pakistan (i.e.
Karachi, Multan, Burewala, Lahore, Sialkot, Narrowal, Faisalabad, Gujranwala, Gujarat, Jhelum,
Rawalpindi & Peshawar) which consists of around 400 manufacturing units and manufactures
72,000 metric tons annually (2011). These producers can be classified as part of organized and
unorganized sectors. The units can be classified as follows:
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Large Units: 24-30 units

Medium Units: 100-125 units
Small Units: 250 units.
GLOBAL MARKET OF PVC

Vinyls low cost, versatility, unique set of properties and performance makes it the material of
choice for dozens of industries such as health care, communications, aerospace, automotive,
retailing, textiles and construction. In the product form it can be as rigid as a pipe or as pliable as a
plastic wrap. Over the past few years the market for PVC is on a steady rise. The major driver for
the growth is the increased penetration of PVC in insulation cables and pipes.
However, the building and construction industries are the basic marketplaces for pipe and the pipe
industry usually finds itself firmly ensconced among those boom and bust industries which ride the
coattails of our nation's economic fortunes. Another factor of growth in PVC pipes is innovations
in pipe resins, pipe structures and pipe processing technology.
In the global market PVC pipes and fittings constitute the largest volume application at 36% of the
marketplace. Worldwide demand for these pipes is forecasted to increase more than four percent
per year through 2007.
In the European pipe market, plastic pipes rank first among other materials and globally plastic
pipes are used at about 54% of the total pipes used. Polyvinyl chloride (PVC) takes the lion's share
at around 62% of the global market. Polyethylene (PE) has 33.5%, while polypropylene (PP) takes
about 4.5%. In Europe, 1.5 million tons of PVC was used in 2002 to make pipes. Similarly in case
of USA pipe demand is projected to grow 2.5% annually to 15.5 billion feet in 2007.
Market of Pipe Industry in Pakistan
There are different types of materials used for piping in Pakistan such as Asbestos Cement (AC),
Mild Steel (MS), Galvanized Iron (GI), Poly Vinyl Chloride (PVC), Cast Iron (CI), Reinforced
Concrete Cement (RCC) and Ductile Iron (DI). Majority of piping applications used in Pakistan
range from 0.5 to 60 die sizes.
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Cluster Development Program PVC Pipes, Lahore Cluster Diagnostic Study 11

Sector wise alternatives to PVC are depicted in the table below:
Water HDPE, Concrete, Copper, PEX Sewer Concrete, HDPE
Conduit & Ducting HDPE, Steel, Aluminum
Drain Waste and Vent (DVM) Cast Iron, Copper, ABS, PEX
Agriculture & Drainage HDPE, Concrete
PVC Growth Potential in Pakistan

At present only the most basic PVC applications are being made in Pakistan and that also
of low quality. Reasons being:
Lack of exposure in international markets
Lack of information about PVC processing and its versatility
If Pakistans per capita consumption (presently around 0.5 kg/person) becomes at par with
world average PVC per capital consumption of around 4.5 kg/person, and then Pakistan
would need 585,000 tons of PVC per annum at present population level.
The number of jobs created by setting up the integrated facilities to produce PVC and by
setting up PVC processing units will be more than 50,000.
The incremental impact of producing and processing PVC on GDP can amount to a
staggering figure of $ 1 billion.
Import substitution $345 Millions
Export (25% of domestic production) $187 Millions
Domestic sales $561 Millions
Energy saving in processing PVC pipes only $48 Millions
In 2011
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Current Demand =93,671 Thousand kilograms (kg)
Determine the Projected Demand
Demand is projected for the PVC Pipes.
Demand is projected in tones

Year Demand
2013 88,097
2014 89,483
2015 91,356
Determine the projected supply
Supply side is covered for the PVC Pipes. Almost, 400 units supply the PVC Pipes in the market.
Supply is projected in tones.

Year Supply
2013 73,800
2014 76,400
2015 81,264
Demand and Supply gap
Gap is the difference between demand and supply.
Gap = Demand --- Supply
Gap is determined in tones

Year Projected Demand Projected Supply Gap Gap in %
2013 88,097 73,800 14,297 16.2
2014 89,483 76,400 13,083 14.6
2015 91,356 81,264 10,092 11
Note: As the gap is +ve for the PVC Pipes, Market have potential. On that base decision will be
made to establish a new unit to fulfill the gap and the unit or project will successful in the future.
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Technical Analysis
Location of the Project
The project is proposed to set up at Small Industrial Area Bahawalpur. The site enjoys the
following advantages:-
- Easy availability of raw material
- Access to the main road, Sources of Power, water, fuel etc.
- Availability of transport & communication like telephone, telex, Internet etc.
- Availability of skilled and Un-Skilled manpower
- Free from other environmental hazards like water logging, floods, salinity etc.
Manufacturing Process
Raw Mixing of Die Meters Setting and

Compression Product Shaping Finish Good
Material Materials
Raw Material
The manufacturing process comprises of the following main steps:

a) Material handling and Storage
b) Mechanical Pretreatment
i) Mixing of materials
ii) Compression
iii) Die meters and product shaping
c) Mechanical Pressing
d) Finish good handling
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A) Raw material handling and storage

The material for the pipes is received from suppliers and stored material up to the requirements of
the unit.
B) MECHANICAL PRETREATMENT
Material is mixed with the chemicals and makes a mixer. Then that mixer is inserted in the
machines which give the final shapes to the products. Four types of product developed and these
are different in their die meters.
C) MECHANICAL PRESSING
At this stage the mechanical compression is done. Then through the further manufacturing process
products are developed in the final shapes. The prices of the material are high. Material is used
according to the requirements.
D) Finish good handling

Finish goods are handled. Final goods are stored and sell at the market prices.
MATERIAL AVAILABILITY
The material is easily available. To see the conditions of Pakistan the availability of material may
be a problem. Although the material for pipe manufacturing is very high cost but the availability in
the market is easy. Chemical received from Engro chemicals and raisin received from other
suppliers.
PRODUCTION CAPACITY
The Plant is capable of 140 bags of raw material usage per day. It is based on 300 working days
per annum and tripled shift per day of eight hours. To fulfill the capacity level foreign technology
and machinery will be adopted. Plant will be capable to produce 2400 tons of output if work at
100% capacity. In the start plant will work on 75% capacity and production capacity will be 1800
tones.
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Financial Analysis
In the financial analysis certain type of statements developed for the proposed project. There is
detail annexure is given.
AnnexureI
Twister PlasticsPvt. Limited (Proposed) SME'sBahawalpur
Estimated Cost of Land
Rs. In(000)
Sr. no. Description Areainmarlas unitcost Total cost
1 Land 140 80,000 11,200
2 Site development expenses 140 1,000 140
3 Registration and legal expenses 140 3,125 437
4 Stamp Duty 140 6,250 875
Total costof land 12,652
Annexu
re II
Twister Plastics Pvt. Limited (Proposed) SME's Bahawalpur
Estimated Cost of Civil works
Rs. In
(000)
Sr. Type of unit of covered rate per Total
no. Description building construction area unit cost
1 Machinery rooms Rcc Square feet 13,613 550 7,487
2 Office rooms Rb Square feet 2,722 650 1,769
3 Store room Rb Square feet 12,251 550 6,738
4 Ware house Rb Square feet 8,167 500 4,084
5 Bath rooms Rb Square feet 816 500 408
6 Boundary walls Rb Square feet 3,750 80 300
7 Guard room Rb Square feet 544 500 272
8 Contingencies 1,000
Total cost of civil 22,058
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works
AnnexureIII
Twister PlasticsPvt. Limited(Proposed)SME'sBahawalpur
EstimatedCost of Machinary
Rs.In(000)
Sr.no. Description Qty unitcost Total cost
1 CMAT 1 1,00,00,000 10,000
2 Mixer 1 15,00,000 1,500
3 Die 1 500,000 500
4 Boiler andcompresor 1 12,00,000 1,200
5 Motor pump 2 25,000 50
6 Generator 1 12,00,000 1,200
7 Installationof machinary 250
8 Transpotationcost 1,320
9 Insurancecost 660
Total costofmachinary 16,680
AnnexureIv
TwisterPlasticsPvt.Lim ited(Proposed)SME'sBahawalpur
Estim atedCostofProject
Rs.In(000)
Sr.no. Description Totalcost
1 Land 5,827
2 Building 22,058
3 Machinary 16,680
4 Vehicles 2,600
5 Furnitureandfixtures 800
6 Officeequipment 300
7 Preoperatingexpenses 1,200
Estim atedtotalfixedcost 49,465
Add Initial networkingcapital 12,625
Totalestim atedcostofproject 62,090
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Annexurev
TwisterPlasticsPvt.Limited(Proposed)SME'sBahawalpur
Estim atedNetinitial workingcapital
Rs.In(000)
Description Am ount
Current assets
Cash 9,000
A/R 700
Inventory
Rawmaterial 5,000
Finishgoods 2,700
Prepayments 1,000
Totalcurrentassets 18,400
Current liabilities
Loan75%of inventories 5,775
Netinitial workingcapital 12,625
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ASSUMPTION UNDERLYING EARNING FORECAST
PRODUCTION AND SALES
1. The proposed PVC unit is based on modern technology and raw material consumption
will 140 bags per day.
2. Operating efficiency of the project is assumed at 75% for the first year and 80% for the
second 80% for third and subsequent years.
3. In line with recent experience of other units based on the most modern pipes machinery,
100% of the production would be sold locally in local market of Bahawalpur and other
surrounding cities.
4. Year-end Inventory is assumed at 10% of the production of that particular year.
5. Selling Prices are assumed in accordance with the current prevailing rates in the local
market. These selling prices are based on average of last five years.
Based over these assumptions, following is the year-wise detail of production, Sales and Sales
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Revenue of the proposed project:
Annexure vi
Estimated Income statement
Rs. In (000)
Description 2013 2014 2015
Sales revenue 251,424 294,641 297,734
Cost of sales
Raw material 184,961 197,292 197,292
Labor 6,077 6,685 7,353
Overheads 12,200 12,740 13,258
Depreciation 5,204 5,204 5,204
208,44 221,92
Total cost of manufacturing 2 1 223,107
Inventory adjustment -less 20,844 1,348 119
Cost of sales 187,598 220,573 222,988
Gross profit 63,826 74,068 74,746
Operating expenses
General and administrative expenses 6,130 6,490 6,886
Selling expenses 17,600 20,625 20,841
Total operating expenses 23,730 27,115 27,727
Operating profit 40,096 46,953 47,019
Interest expenses 4,657 4,191 3,725
Amortization of pre-production exp. 400 400 400
Profit before workers fund 35,039 42,362 42,894
Workers fund 8,764 10,322 10,546
Net profit 26,275 32,040 32,348
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Annexure vi A
Twister Plastics Pvt. Limited
(Proposed) SME's Bahawalpur
Assumption underlying earnings forecast
Production at 100% capacity
PVC Pipes manufacturing
%
No of outp Quantity in
140 bags of raw material / day vessals ut ''tones''
3'' PVC Pipes 4 30 720
4'' pipes 4 20 480
6'' pipes 4 30 720
12'' pipes 4 15 360
wastage 4 5 120
Total 2,400
Annexure VI A
Cost
of Production
Raw Material
Years 2013 2014 2015
Capacity utilized 75% 80% 80%
Required raw material:
Quantity in
Description ''tones''
140 bags of raw material / day 1,800 1,920 1,920
Total quantity consumed 1,800 1,920 1,920
Cost of raw material
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Description Rs in ''000''
197,2
Raw material @ 102,756 per tone 184,961 92 197,292
197,2
Total cost 184,961 92 197,292
Annexure VI A
Labor cost
No. of Salary/Month/W Annual salary
Plant labor Employees orker ''000''
Plant manager 1 60,000 720
Machine operators 2 30,000 720
Helper 2 20,000 480
Plant labor 12 16,000 2,304
Pean and sweeper 4 10,000 480
Guard 2 10,000 240
Store keeper 1 20,000 120
Total 5,064
Fringe benefits on basic
salary 20% 1,013
Total labor cost 6,077
Year wise wages of labor Rs in ''000''

Total cost of labor 6,077 6,685 7,353
Annexure VI A
Manufacturing overhead cost

Description Rs in ''000''
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Fixed cost
Electricity expense 800
Insurance expense 1,500
Machinery and Building
maintenance 1,800
Total fixed cost 4,100
Variable overheads
Electricity expense 9,000
Machinery and Building
maintenance 1,800
Total variable over heads 10,800
Year ending manufacturing

overheads as per different
capacities
Description 2,013 2014 2015
75% 80% 80%
Rs in
''000''
Fixed cost 4,100 4,100 4,100
Variable cost 8,100 8,640 9,158
Total overhead cost 12,200 12,740 13,258
Fantastic 4 Page 36
Annexure VI A
Year ending 30th December
Capacity utilized 2011 2014 2015
75% 80% 80%
Quantity in
tones
Production of 3'' PVC Pipes
a) No of units manufactured 540 576 576
Add: Opening inventory 54 58
Total units available for sale 540 630 634
Less: Closing inventory 10% of
production 54 58 58
Units sold 486 572 576

b) No of units manufactured 360 384 384
production 36 38 38

c) No of units manufactured 540 576 576
Fantastic 4 Page 37

production 54 58 58

d) No of units manufactured 270 288 288
production 27 29 29
Sales Revenue Rs in ''000''

Unit
Description price 75% 80% 80%
202,50 116,4
a) 3'' pipes 0 98,415 114,817 58
116,00 44,54
b) 4'' Pipes 0 37,584 44,312 4
170,00 97,92
c) 6'' pipes 0 82,620 97,240 0
135,00 38,81
d) 12'' pipes 0 32,805 38,272 2
297,7
Total sales 251,424 294,641 34
Annexure
VI A
Selling expensses
Selling expensses are
assumed to be 7% of sales revenue
Rs in
''000''
Selling expneses 23,270 27,148 27,535
Annexure
VI A
Administrative and general expenses
Salary Annual
No of / salary in
Designation Employees Month '000'
Managing director 1 120,000 1,440
Accountant 1 40,000 480
Fantastic 4 Page 38
Clerk 2 25,000 600

Gowdon keeper 2 20,000 480
total 3,000
Fringe benefits 20% of basic salary 600
Total salary 3,600
General expenses
Year
expensis
Description in '000'
Traveling expenses 300
Printing and stationary 180
Telephone, telex and postage 180
Rent and taxes 1,200
Entertainment 200
Legal and audit 170
Miscelllaneous 300
Total 2530
Assumption:
Administration salaries will increase @ 10% every year
Depriciation Rs in ''000'''
15% of building 3,309
10% of Machinary 1,668
6% vehicles 156
7% of furniture and fixtures 56
5% of office equipments 15
total 5,204
Fantastic 4 Page 39
Annexu
re VII
Twister Plastics Pvt. Limited
(Proposed) SME's Bahawalpur
Estimated Cash Flow Statement
Rs. In (000)
Opera
ting years
years ending Dec. 31 2012 2013 2014 2015
SOURCES OF FUNDS:
47,0
Operating Profits 0 40,096 46,953 19
Depreciation 0 5,204 5,204 5,204
52,22
Total Funds from Operation 0 45,300 52,157 3
Other Sources:
Fantastic 4 Page 40
31,0
Long Term Loan 45 0 0 0
short term Bank Borrowings 0 0 0 0
31,0
Paid-Up Capital 45 0 0 0
62,0 52,22
Total Sources of Funds 90 45,300 52,157 3
APPLICATION OF FUNDS:
48,2
Investment in Fixed Assets 65 0 0 0
Financial Charges during Construction 0 0 0 0
1,20
Pre-Production Expenses 0 0 0 0
Repayment of:
Long Term Loan 0 0 3,105 3,105
Financial Charges On:

Long Term Loan 0 4,657 4,191 3,725
short term Bank Borrowings 0 0 0 0
PAYMENT OF:
Taxes 0 0 0 0
Dividends 0 0 0 0
10,32
Worker's Fund 0 0 8,764 2
3,00 32,00
Short Term Investment 0 10,000 30,000 0
6,00
Increase in Current Assets (Other than Cash) 0 25,624 2,156 218
58,4 49,37
Total Application of Funds 65 40,281 48,216 0
3,62
Cash Surplus/(Deficit) 5 5,019 3,942 2,853
12,56
Cash at the Beginning of the Year 0 3,625 8,625 7
3,62 15,4
Cash at the end of the year 5 8,644 12,567 20
Annexure VIII
Estimated Balance sheet
Rs. In (000)
End of Oper
Construction ating years
Fantastic 4 Page 41
years ending Dec. 31 2012 2013 2014 2015

ASSETS:
CURRENT ASSETS:
12,56 15,42
Cash and Bank Balance 3,625 8,644 7 0
30,00 32,00
Short Term Investment 3,000 10,000 0 0
Accounts Receivable 0 700 1,700 9,794
Inventories:
12,68 12,68
Raw material 5,000 11,980 8 8
22,19 22,31
Finished Goods 0 20,844 2 0
Advances, Deposits and Prepayments 1,000 1,000 1,000 1,000
80,14 93,21
Total Current Assets 12,625 53,168 7 2
FIXED ASSETS:
48,26 48,26
Fixed Assets at Cost 48,265 48,265 5 5
Accumulated Depreciation on Fixed 10,40 15,61
Assets 0 5,204 8 2
58,67 63,87
Fixed Assets Net 48,265 53,469 3 7
Intangibles 1,200 800 400 0
139,2 157,0
Total Assets 62,090 107,437 20 89
LIABILITIES AND EQUITY:
CURRENT LIABILITIES:
11,59
Short Term loans 0 10,308 8 0
interest payable 0 0 0 0
10,32 10,54
Worker's Fund Payable 8,764 2 6
Current Maturity of Log Term Debt 0 3,105 3,105 3,105
25,02 13,65
Total Current Liabilities 0 22,177 5 1
LONG TERM DEBTS:
24,83 21,73
total Long Term Debt 31,045 27,940 5 0
EQUITY:
Paid-Up-capital 31,045 31,045 31,045 31,045
58,31 90,66
Retained Earnings 0 26,275 5 3
89,36 121,7
Total Equity 31,045 57,320 0 08
139,2 157,0
Total Liabilities and Equity 62,090 107,437 20 89
Fantastic 4 Page 42
Annexure IX
Break even analysis
Variable fixed total

at 75% capacity cost cost cost
184,96
Raw material 184,961 0 1
Labor 6,077 0 6,077
Overheads 8,100 4,100 12,200
Depreciation expenses 0 5,204 5,204
Administrative & General Expenses 0 6,130 6,130
Selling Expenses 17,600 0 17,600
Interest / Mark-Up Expenses 0 4,657 4,657
Amortization of Pre-Production
Expenses 0 400 400
Total: 216,738 20,491 237,229
20,491
Break even point =-----------------------------------------
*75%
251,424 -- 216,738
Break even point 44.30%
Annexure IX
Twister Plastics Pvt. Limited (Proposed) SME's
Bahawalpur
Break Even Analysis
Variable fixed total

cash break even at 85% capacity cost cost cost
197,29
Raw material 197,292 0 2
Labor 7,353 0 7,353
Overheads 9,158 4,100 13,258
Administrative & General Expenses 0 6,886 6,886
Selling Expenses 0 20,841 20,841
Interest / Mark-Up Expenses 0 3,725 3,725
workers fund 0 10,546 10,546
Debt payment 0 3,105 3,105
Total: 213,803 49,203 263,006
Fantastic 4 Page 43
49,203
Breakevenpoint =-----------------------------------------*80%
297,734 -- 213,803
Breakevenpoint 46.90%
A n n e x u re - X I
C a lc u la tio n o f In te rn a l F in a n c i a l R a te o f R e tu rn
Rs in ''0 0 0 ''
C a p it a lO p e ra t in g W o rk e r's N e t C a s hN e t C a s h I n flo w
Y e a rs O u t la y P ro fit D e p re cia t io n F u n d T a x e s R e t u rn ( O u t flo w )
0 5 5 ,4 6 5 - - - - - -5 5 ,4 6 5
1 3 0 ,2 3 1 4 0 ,0 9 6 5 ,2 0 4 8 ,7 6 4 0 3 6 ,5 3 6 6 ,3 0 5
2 1 8 ,2 1 6 4 6 ,9 5 3 5 ,2 0 4 1 0 ,3 2 2 0 4 1 ,8 3 5 2 3 ,6 1 9
3 1 7 ,3 7 0 4 7 ,0 1 9 5 ,2 0 4 1 0 ,5 4 6 0 4 1 ,6 7 7 2 4 ,3 0 7
4 0 4 7 ,0 1 9 5 ,2 0 4 1 0 ,5 4 6 0 4 1 ,6 7 7 4 1 ,6 7 7
5 - 4 7 ,0 1 9 5 ,2 0 4 1 0 ,5 4 6 0 4 1 ,6 7 7 4 1 ,6 7 7
6 1 ,5 0 0 4 7 ,0 1 9 5 ,2 0 4 1 0 ,5 4 6 0 4 1 ,6 7 7 4 0 ,1 7 7
7 - 4 7 ,0 1 9 5 ,2 0 4 1 0 ,5 4 6 1 6 ,4 1 3 2 5 ,2 6 4 2 5 ,2 6 4
8 - 4 7 ,0 1 9 5 ,2 0 4 1 0 ,5 4 6 1 6 ,4 1 3 2 5 ,2 6 4 2 5 ,2 6 4
9 - 4 7 ,0 1 9 5 ,2 0 4 1 0 ,5 4 6 1 6 ,4 1 3 2 5 ,2 6 4 2 5 ,2 6 4
10 - 4 7 ,0 1 9 5 ,2 0 4 1 0 ,5 4 6 1 6 ,4 1 3 2 5 ,2 6 4 2 5 ,2 6 4
11 1 ,5 0 0 6 0 ,3 4 5 2 ,7 5 5 4 ,8 2 8 2 4 ,9 8 3 3 3 ,2 8 9 3 1 ,7 8 9
12 - 6 0 ,3 4 5 2 ,7 5 5 4 ,8 2 8 2 4 ,9 8 3 3 3 ,2 8 9 3 3 ,2 8 9
13 - 6 0 ,3 4 5 2 ,7 5 5 4 ,8 2 8 2 4 ,9 8 3 3 3 ,2 8 9 3 3 ,2 8 9
14 - 6 0 ,3 4 5 2 ,7 5 5 4 ,8 2 8 2 4 ,9 8 3 3 3 ,2 8 9 9 9 ,4 3 2
15 - 4 1 ,3 1 0 6 0 ,3 4 5 2 ,7 5 5 9 ,6 5 6 4 9 ,9 6 5 3 ,4 7 9 4 4 ,7 8 9
IFRR 42%
Fantastic 4 Page 44
Assumptions:-
Calculation of IFRR for the project has been carried out under the following assumptions:-
1. The economic life of the project would be 15 years
2. The entire capital outlay would be incurred one year prior to the
Commencement of commercial operations;
3. Motor Vehicles and operating equipment would be replaced after
Every five years;
4. Salvage value at the end of the life of the project represents
Recovery of working capital, book value of buildings, office
Furniture and fixtures and original value of land.
Fantastic 4 Page 45
Fantastic 4 Page 46
Economical Analysis
Economic evaluation is considered prominent yardstick to measure the viability of a project. This
analysis is directed towards determining whether the project is likely to contribute significantly to
the development of the economy as a whole and the contribution of the project would be great
enough to justify the use of available resources. This aspect is reviewed under the following:-
INITIAL IMPACT
In order to pursue a theory of balanced growth of the economy the current government is putting
an emphasis on industrialization of our inherently agrarian economy. Industrialization of
substantial dynamic benefits is important for changing the traditional structure of our less
developed economy, while providing employment for a rapidly increasing labor force, and saving
scarce foreign exchange by import substitution and creating export potentials.
A capital expenditure creates incomes for people engaged in the fabrication of capital goods, who
in turns spend their incomes on consumer goods. An initial original capital investment creates a
wave of income and spending which has multiplied effect on the national income, increasing it by
several times, the original investment. The initial original capital investment of Rs. 62 million in
local currency would have a healthy impact on the GNP of the country, the extent of which
depends on the degree of multiplied effect.
It may have major contribution to the society benefits. There will be employment, infrastructure
improvements and that will be a factor to improve the living standards of the peoples.
Fantastic 4 Page 47
EMPLOYMENT OPPORTUNITIES
The project would create employment opportunities for the following staff:
Detail Total Nos.
Skilled Labor 15
Factory Administrative Staff 14
Marketing Staff 02
BENEFIT COST ANALYSIS
The benefit/Cost ratio of the project is worked out in times which are considered satisfactory. The
NPV of the expected benefit and costs has been taken into account for the calculation of this ratio.
Fantastic 4 Page 48
Fantastic 4 Page 49
Ecological Analysis
It is the analysis how the project is beneficial for the environment and what will be the problems
due to the implementation of the plant. The project may be more beneficial for the society and
environment because there will be improvements in the environment with respect to infrastructure,
employment to society, improvements in the living standards, development structures, better
education system, health system and other facilities.
Speciality Services
As per customer requirement a complete inventory of UPVC and CPVC valves and fittings in all
configurations is readily available, making Twister a one-source supplier for virtually any piping
systems application.
LEAD FREE PVC PIPE
Too much lead in the body can seriously injure the brain, nervous system, the kidneys and red
blood cells. The symptoms of higher levels of lead in the body is manifested by and can cause
mental retardation, fits (convulsions), falling out (unconsciousness, coma), and even death.
In the years past, that kind of effect was called lead poisoning. Exposures high enough to cause
coma and death are very uncommon today, but they haven't disappeared totally. As we keep using
more lead there will be more exposure to lead in the environment.
Lead accumulates in our bodies, and especially in children's bodies. Exposure to small amounts of
lead over time can mean a long-term accumulation of lead in a child, raising the child's risk of bad
health effects. Pregnant women who have lead stored in their bones may release some of that bone
lead into their K blood, where it can reach the womb and fetus during pregnancy. That kind of
transfer potential makes us think about lead exposures in today's children and what that may mean
for the children.
Twister UPVC Pipe has very impressive performance record in commercial housing, multi-storey
buildings & public health projects for hot & cold water including high-pressure requirements. By
launching Twister Jadeed (the Lead Free Pipe) we insure that public health is our first priority
and our social responsibility.
Fantastic 4 Page 50
There may be some problems to the society due to the implementation of unit. Pollution problems,
chemicals, sewerages, water and smell problems. These problems may arise but before that there
will proper arrangements to remain safe from these problems. There will be proper arrangements
and implementations of society safety systems. All the government rules will be followed and
there will be no objection or issue to any person in the society.
Storage & Handling
Twister piping products are inspected, handled and loaded with great care at the factory using
methods that have been developed specifically for plastic pipe to ensure that damage is minimized
and overall quality is maintained during shipping. It is the carriers responsibility to deliver the
shipment in good condition. It is the receivers responsibility to ensure that there has been no loss
or damage, and that the products are unloaded and stored properly after receipt. Reasonable care
and common sense should be used when handling and storing Twister thermoplastic piping
products.
Thermoplastic pipe and fittings may be stored indoors or outside in yards. If stored outdoors, pipe
and fittings should be protected from direct exposure to sunlight, and pipe should be properly
supported in storage to prevent sagging or bending. Pipe should be stored at the job site on level
ground in the unit packages (skids) provided by the factory. Caution must be exercised to avoid
compression, damage or deformation.
Thermoplastic pipe must not be stored in tightly enclosed areas subject to elevated temperatures or
close to heat producing sources such as heaters, boilers, steam lines, engine exhaust etc. Exposure
to excessive temperatures will result in distortion and deformation of the product. When stored
outdoors Twister thermoplastic pipe must be covered with a non-transparent material. This
covering must provide adequate air circulation above and around the pipe as required to prevent
excessive heat absorption that can result in discoloration and deformation of the product. PVC
piping products in storage should not be exposed to temperatures above 150F. CPVC piping
products in storage should not be exposed to temperatures above 210F.
Although Twister products are tough and corrosion resistant, they should not be dropped, have
objects dropped on them, nor subjected to external loads. Thermoplastics can be damaged by
abrasion and gouging. Pipe must not be dragged across the ground or over obstacles. Impacts such
Fantastic 4 Page 51
as dropping from sizable heights and/or rough handling should be avoided, particularly in cold
weather. The product shall be inspected for any scratches, splits or gouges that may have occurred
from improper handling or storage. If found, these sections must be cut out and discarded.
Safety
Thermoplastic piping is a general term applied to a variety of different plastics. A user of plastic piping
should select the kind of plastic best suited for his use.
Special care must be used to apply proper engineering, design and installation procedures.
Twister recommends against the use of its thermoplastic piping systems for transport or storage of
compressed air or gases. Trapped air must be removed from liquid piping systems so that no air remains
locked in the system when pressure is applied to the liquid. Excessive surge pressure must be avoided.
Surge pressure can develop if liquid movement through the pipe is near maximum velocities and valves
are closed abruptly. Maximum velocity is generally considered to be five feet per second.
Failures can occur at the joints connecting the pipe and the fittings. For example, threaded joints have a
diminished wall thickness because of the cut of the thread into the wall. Also, improperly cemented joints
will leave the strength of the joint impaired.
Temperature extremes, both hot and cold or changes in temperature can result in failures of plastic pipe in
the following cases:
(1) Breakage or other damage on the job site in cold weather can be caused by impact with tools, vehicles
or rocks.
(2) Heat of solution of chemicals or heat from other sources can cause failure because the piping systems
will be distorted.
(3) Wide variations in temperature when the pipe is restrained as in concrete or is otherwise anchored can
lead to cracking and breakage.
(4) Freezing of pipe contents when the line is full can lead to breakage.
(5) When heat is introduced by a pump especially when on recirculation, the pipe or joints can fail.
(6) Expansion and contraction can cause leakage or breaks at joints.
there are the safety requirements and work done by the company.
Fantastic 4 Page 52
Project Limitations
Time availability
Less educated target peoples
Not proper coordination by the respondents
Lack of secondary information
No proper information about the pvc pipes
Short of time
There is no reliable information availability
Lack of information gathering sources
High complexity of the project
Fantastic 4 Page 53
Suggestions
Project scope is good
A unique type of project
There should be proper information sources
For the project time duration should be high
There should be cooperation by the respondents
Well educated peoples should be there in the market
For the project high level of technical and intellectual skills needed
Try to get more reliable information
Information searching level should be high
Try to use your skills and abilities to accomplish the project
There should be proper coordination and cooperation between the group members and all
relevant peoples.
Fantastic 4 Page 54

Twister Plastic Pvt. Ltd. Feasibility Report

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Twister Plastic Pvt. Ltd. Feasibility Report

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Twister

Twister Plastic Pvt. Limited

Sir Adeel Akhtar

preparation of this report.

Contributing our efforts to the

Location and Site

Market and demand capacity

Material and inputs

Sales Revenue 251,424 294,641 297,734

Financial position of business(000)

Terms and conditions

BENEFIT COST ANALYSIS........................................................................................48

Project sanction 1month ....

Civil works 3 months .

Training 2months ...

Machine of site 15days

Installation and erection ....

Market and Demand Analysis of PVC Pipes

Different Properties of PVC

UPVC Pipes as per (BS-3505/PS-3051) UPVC Pressure Pipes (Class B, C, D & E)

UPVC Fittings UPVC Fittings ASTM D-2466 (Sch. 40 and 80)

UPVC Pressure Fittings UPVC Pressure Fittings

CPVC Fittings CPVC Fittings

TWISTER CPVC Fittings available in sizes from to 8, produced in-house and

Poly Vinyl Chloride Pipes

Large Units: 24-30 units

GLOBAL MARKET OF PVC

Cluster Development Program PVC Pipes, Lahore Cluster Diagnostic Study 11

PVC Growth Potential in Pakistan

Current Demand =93,671 Thousand kilograms (kg)

Determine the Projected Demand

Demand is projected for the PVC Pipes.

Demand is projected in tones

Supply is projected in tones.

Demand and Supply gap

Gap is the difference between demand and supply.

Gap = Demand --- Supply

Gap is determined in tones

Location of the Project

Raw Mixing of Die Meters Setting and

The manufacturing process comprises of the following main steps:

A) Raw material handling and storage

D) Finish good handling

ASSUMPTION UNDERLYING EARNING FORECAST

PRODUCTION AND SALES

Revenue of the proposed project:

Cost of raw material

Year wise wages of labor Rs in ''000''

Manufacturing overhead cost

Year ending manufacturing

Production of 4'' PVC Pipes

Production of 6'' PVC Pipes

Less: Closing inventory 10% of

Production of 12'' PVC Pipes

Sales Revenue Rs in ''000''

Clerk 2 25,000 600

Financial Charges On:

years ending Dec. 31 2012 2013 2014 2015

Variable fixed total

Variable fixed total

BENEFIT COST ANALYSIS

LEAD FREE PVC PIPE