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Plastic Recycling Business Plan

Hind Plastics
High Quality Delievered

Group 22

ANKUR VERMA
BALVINDER PRATEEK DAHIYA SHIVAM RAJAT

Executive summary COMPANY OVERVIEW .................................................................................................... 6 Mission Statement ..................................................................................................... 6 Markets and Products .................................................................................................... 7 Objectives................................................................................................................... 7 Key to success: ........................................................................................................... 7 Product and services ...................................................................................................... 8 Market comparison .................................................................................................... 8 Possible obstacles .......................................................................................................... 9 Industry and marketplace analysis ................................................................................ 9 Industry analysis ........................................................................................................ 9 STRUCTURE OF THE PLASTICS INDUSTRY .................................................................... 11 Raw Material Producers........................................................................................... 11 Compounders........................................................................................................... 11 Stockists ................................................................................................................... 11 Specialist Manufacturers or Molders ...................................................................... 11 Other Manufacturers ............................................................................................... 12 Fabricators ............................................................................................................... 12 Marketplace analysis ................................................................................................... 13 Customer analysis ........................................................................................................ 13 Competitor analysis ..................................................................................................... 13 Marketing strategy....................................................................................................... 15 Product/ service strategy ............................................................................................. 15 Pricing strategy ............................................................................................................ 15 2|

Distribution strategy .................................................................................................... 16 Advertising & promotion strategy ............................................................................... 16 Sales strategy ............................................................................................................... 16 Marketing & sales forecast .......................................................................................... 17 Development................................................................................................................ 18 Development strategy ............................................................................................. 18 Management ................................................................................................................ 19 Job description ......................................................................................................... 19 Operations ................................................................................................................... 20 Stages of Recycling and Production ......................................................................... 21 Chipping ................................................................................................................... 21 Segregation .............................................................................................................. 21 Cleaning.................................................................................................................... 21 Agglomerating / Colouring ....................................................................................... 22 Extrusion / Palletisation ........................................................................................... 22 Fabrication into end Product ................................................................................... 22 Scope of operations ................................................................................................. 22 Supply chain ............................................................................................................. 22 Gantt chart .............................................................................................................. 25 FACILITY LAYOUT ............................................................................................... 25 Financials.................................................................................................................... 26 Income statement ........................................................................................................ 27 Balance sheet ............................................................................................................ 28 Break Even Point .......................................................................................................... 30 3|

Appendix ...................................................................................................................... 31 Annuity table:........................................................................................................... 31 Bibliography ................................................................................................................ 36

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EXECUTIVE SUMMARY
Plastic is the basic need of our day-to-day life. During recent years the plastic industry has grown with a substantial growth rate. This growth is driven by three sectors viz. packaging, infrastructure and agriculture. There are the various verities of plastics out of which PVC (Polyvinyl chloride) and PET (Polyethylene Terephthylene) plastics have their considerable contribution. PET plastics are generally used in the manufacturing of beverage bottles for the packaging and PVC plastic is used in the production of household plastic materials. The growing utilization of plastics in industrial and consumer applications and surrounding solid waste recycling, has led to an increased demand for recycled plastic resins and products. We the Hind plastics provide a wide range of plastic solutions for household and raw material for packaging of various companies. As a part of our ongoing efforts to exploit this opportunity we will recycle the plastics and then produce kitchenware items and other related plastic material. We will also sell the recycled plastics to the companies in the plastic business. We will have a recycling plant along with the production unit. The raw material will be procured from the waste collectors. The raw material will be post-consumed beverage bottles and other soft plastic materials Our main focus is our industrial customer whom we will sell PET bottles and PET flakes. It will contribute more than 60% of our sales. We will also focus on the household plastic business, which is the part of our portfolio. The initial set up cost will be Rs 34, 40,000. Hind plastics will be a solution proprietorship business run by the promoters. Since plastic material does not carry any brand name so it will give us an addition benefit in long term to establish our brand name. To exploit the market we will use penetration pricing as our marketing strategy and utilize our stringent distribution network and strong industrial relationship. As a future plan in coming years we will increase the variety of plastics like LDPE (Low density polyethylene) and HDPE (High density polyethylene). By doing this we will be able to produce plastic carry bags and raw material for production for plastic chairs and tables and other fiber based products.

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COMPANY OVERVIEW
Hind Plastics provide a wide range of plastic solutions for households and raw material for packaging to the various companies. Allahabad is the place where the facility will be established and other operation will commence. We will collect the plastic garbage like consumer beverage bottles, plastic bags from various garbage stores and then our recycle unit will process it which eventually be used for the production of finished goods. The plastic garbage we are getting as raw material has two components one is PVC (Polyvinyl chloride) and other is PET (Polyethylene Terephthylene). Firstly the whole garbage is melted and then PVC and PET are separated from each other by froth flotation technique. We will create a plant (actual facilities to be shared with the recycling unit) to manufacture extruded plastic flakes (purified plastic). The extruded plastic is then molded in the various products. We will produce two types of replay plastics PVC (Polyvinyl chloride) PET (Polyethylene terephthylene)

Mission Statement
Strive to provide the excellent plastic solution to the customers at competitive prices. Continually expand our range of products. Poised to service both large and small customers.

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MARKETS AND PRODUCTS


The plastic products usually do not carry a brand name so intruding in the business like plastic will not be too hard with low price strategy. The population of Allahabad and the cities around it like Varanasi, Gorakhpur, Johnpur is around 3 Crores and this area basically comprises of low to middle income group families so they focus on plastic products rather than fiber since it is a cheaper. Hence it is huge market to exploit. From Allahabad city 500 tons of solid waste is produced from that 15tons of plastic bags and around 7 tons of plastic bottles is generated per day. So the supply of raw material will be continuous. Apart from this we will sell raw material for packaging to the various small companies in this area. Around 30 small and medium scale companies are working in this region. So a large amount of industrial customer is also available. There are two folds of products that we are providing one are industrial and other is household.

Objectives
Develop a business that survives on its own cash. Create a company that exceeds customer satisfaction level. Expand the service to whole UP in first five years and then to Delhi. Extending the services to electronic component manufacturing companies for production of capacitors printed circuit boards etc.

Key to success:
The main keys to the success of the Company are: Secure Supply- Contract for supply of post-consumer bottles and postindustrial manufacturing waste for PET raw material feed stock. Satisfy our customer so that we can retain them Maintain low overhead and operating costs Provide better prices than all our competitors

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PRODUCT AND SERVICES


We will provide a wide range of plastic products for households and raw material for packaging. The recycled plastic is processed to Polyethylene Terephthalate (PET). PET is a thermoplastic polymer viscous of polyester family. The biggest property of this compound is it transparent. This is the reason why it is used for packaging. Apart from this PET have good strength, ductility, stiffness and hardness. After the recycling process completed an extruded plastic is generated. Plastics extrusion is a high volume manufacturing process in which raw plastic material is melted and formed into a continuous profile. The products we are producing are Cleaned and recycled plastic flakes of PET and bottles, recovered from postconsumer beverage bottles. (This PET will work as raw material for packaging to various firms, not for the end user) Household finished plastic goods. We will manufacture plastic tubes of various diameters, plastic kitchenware. (For the end user) PET flake will be sold to thermo formers (those who mold plastic sheets into usable products) primarily to be used to produce high-visibility packaging. And also to the beverage companies for packaging.

Recycled plastic is widely used in mainstream construction products such as damp proof membrane, drainage pipes, ducting and flooring. Bins, street signs and planters are frequently made from plastic. They are cost competitive and resistant to damage. Local authorities and schools are able to demonstrate recycling in action by specifying recycled products High strength PET is used in the clothing, furnishings, tyre cord and technical textiles. Apart from PET the household plastic will be directly sold to the end customers. In day-to-day life plastic items like water bottles, shop case scrubber etc. is frequently used. So there is a big demand of these in local market.

Market comparison
While quality and delivery are important factors to our potential clients, price is most often the determining factor in a buying decision. Good-quality packaging products manufactured from recycled (less expensive) resins, as close as practical to the end customer's operations, will be most competitive and achieve a significant market share. These factors have helped to determine the business parameters of Replay Plastics. 8|

POSSIBLE OBSTACLES
The product is completed and ready for the market launch. The possible obstacles are: Unavailable or scarce raw material stock for production Replay is confident that it has secured good availability of low cost post-consumer PET bottles (feed stock) derived from post-consumer beverage bottles. It may be possible that we would not get desired raw material. Company may not meet environmental standards This environmentally-favorable venture provides for the development of technically feasible and economically viable solutions to PET plastic beverage bottle recycling, as well as environmentally aware in-house re-use practices which filter and return nearly all of the process water to the production lines

INDUSTRY AND MARKETPLACE ANALYSIS


Industry analysis
Plastic recycling is an industry in itself in India. According to the Crisil research 7360 companies are working in this industry with a turnover of Rs 9200 Crore provides employment to 3.5 million people. In India, per capita plastic consumption is one of the lowest in the world. The per capita consumption is just one fifth of world average that is 5kg. The domestic demand of plastic has grown by 9% and reached to 4.5MMT in year 2005.The GDP has grown during this period at 6.3% and plastic industry 1.3 times of GDP. According to the Crisil report the demand of plastic by 2012 will be around 12MMT. The plastic consumption in India is booming. Demand for commodity plastics is growing at the rate of 15% per year. . India holds immense potential for the use of plastic in the infrastructure and agriculture. In case of packaging industry we are using more plastic than the developed countries. The growth is driven in three major sectors infrastructure that is 13%% of the total, packaging is 15% of the total and 10% for plastic consumer durables. It is projected that the plastic waste generation will reach the will reach the level of 1.6 million tons annually. India produces 5600 tons of plastic waste per day.

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Region wise and polymer wise turnover of recycling industry in Rs.Crore Region West East North South Total PVC 156 75 338 111 680 PET 383 86 158 139 766

Each region is specialized in one type of plastic viz south: PET; north: PVC; Plastic India Foundation estimates the current plastic recycling rate at 60%. One estimate is that about 20,000 microenterprises are engaged in reprocessing and recovery of plastic waste in addition to 180,000 of various sorting and washing units, 60% of which are unregistered. Delhi alone has estimated 53,400 units and Delhi and Bombay together process over 50% of India's waste plastics.

STRUCTURE OF THE PLASTICS INDUSTRY


Raw Material Producers
These are chemical and petroleum companies who produce "virgin" plastic (sometimes called resin or polymer) in huge quantities. The main influence they have on the recycler is to fix prices and availability of virgin materials. Virgin material is delivered in powder or pellet form, in plastic or paper sacks of around 20 kilos weight, in large cardboard drums that hold many times that quantity or even by road tanker.

Compounders
These specialist companies, usually small, stock various polymers and provide the manufacturers of plastic goods with technical advice and the most suitable materials or mixtures for each individual need. The compounder is often the best market for the recycler because he possesses superior technical knowledge and has a large volume throughput of virgin material, in which small percentages of reclaim will reduce cost without seriously affecting the quality required by the molder.

Stockists
These warehouses stock polymers and compounds but neither manufacture themselves, nor provide a compounding service. They may be agents or subsidiaries of the producer companies or departments of companies concerned with the supply of other materials such as chemical, rubber or paper. They may be willing to stock reclaim alongside virgin materials, especially if these are in short supply.

Specialist Manufacturers or Molders


These buy their raw materials from compounders. If they do their own compounding, or if the material is used as produced and does not need compounding, they may buy direct from stockists or producers. They are specialists in plastics and do not perform other types of manufacturing. They may be an attractive market to the recycler because they operate at high volume, but rarely have as much flexibility to vary product quality as molders who know, accurately, the final market for the product. 11 |

Other Manufacturers
Many companies are not plastics specialists but employ molding operations in the manufacture of some other product. For example shoe and boot makers use plastics extensively and may carry out the various plastics molding operations in the same production sequence as the work in leather, canvas, rubber etc. Many manufacturers use plastic packaging machinery at the end of a production operation.

Fabricators
These firms cut and join sheet, rod or extrusion to manufacture a variety of products. They have no opportunity to use reclaim. Machinery and Tool Makers and other sector of the plastics industry justifies mention although not customers for reclaim. The makers and suppliers of plastics manufacturing machinery, tools, moulds and dies are well informed about who does what, who makes what and who uses what within the local plastics industry. They may advise who is likely to buy material.

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MARKETPLACE ANALYSIS
Various overseas players wish to explore the Indian market and invest in opportunities thrown open by the country, projected to be world number 3 in plastics consumption by 2010. As shown above the north region of India is specialized in recycling of PVC. So there is a great scope of PET recycling. Apart from this the other A huge market with full of opportunity. Absence of standard product and service Well connected with other rural areas Having good transportation facility

CUSTOMER ANALYSIS
Since we are new player in the market so we need to make some stringent strategies to penetrate market and grab customers. The customers of the plastic industry are scattered due to lack well known brand names. So our first priority will be to accumulate the defused customers. The direct customers are the customers whom we are selling our product regularly. So for us households whom we are selling plastic goods and companies who are getting raw materials for packaging are direct customers (PET bottles). So only in Allahabad around 20,000 families are our direct prospective customers and in terms of business-to-business market around 20 small and medium scale companies are our direct customers Apart from them there are few small companies that are giving compounding services. They use to collect various types of plastics flakes along with the virgin plastic and suggest customer (companies) in choosing appropriate plastic. An Asha enterprise is one compounder whom we will sell our plastics.

COMPETITOR ANALYSIS
In plastic manufacturing market there is no specific brand name exists so small companies that are in this business flood the market. So they are our biggest direct competitors. As we are also not alone as a supplier of PET to the companies as raw materials there are many companies in this region that are supplying PET. Indira Plastics is one of 13 |

them who is currently selling all types of plastics items. So in case of business-tobusiness market they are our direct competitors. Kanpur is plastic recycling city of UP. The direct threat we will also have is with the companies operating in Kanpur. But as the distance between Kanpur and Allahabad is 200km as well as the road is not in good condition, so it will not affect much.

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MARKETING STRATEGY
The Company has chosen to focus on the production of plastic packaging materials from recycled post-consumer beverage bottles. We have identified a significant available market in the eastern part of UP. All of our initial marketing strategy will be to secure contracts in that segment, and after reaching full planned capacity, look to grow in concert with that segment and related markets. We see little need at present for further market research and development, and will focus on continually updating our production technology in an effort to remain in the forefront of our chosen marketplace.

PRODUCT/ SERVICE STRATEGY


The packaging companies require high quality and highly transparent PET bottles. The companies that are producing mineral water will reject PET bottles with even small impurity/ opaqueness. So we the Hind Plastics provide high-end PET flakes for the perfect packaging. Hind Plastics will apply recycling and extrusion technology managed by decades of industry specific expertise to create a competitive advantage for its clients. These processes will produce clean, cost-efficient, recycled raw material for manufacturers of thermoform, laminate and other high value-added products, and high strength packaging strapping for shippers of large products and pallets, thereby reducing costs and creating a clear pricing edge among their competitors . Plastic bags and plastic sheets are now in high demand. And this demand is driven by continuously increasing promotional activities.

PRICING STRATEGY
As plastic products do not carry any brand name so only pricing and distribution strategies will works to achieve competitive edge. The pricing strategy we will use is penetration pricing. The price of all household plastic goods we will sell will be lower than the market price. Also for the PET flakes and bottles the price will be lower than the competitors. A lower price enables me to get contracts of PET bottles and sheets from various companies. In case of kitchenware and other household products we will provide combo offers and discounts which a common customer expects.

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DISTRIBUTION STRATEGY
As I described before that firstly we will target Allahabad city and villages close to it. We will have a distribution center in the Allahabad city that continuously maintains the supply of goods. So the household plastics will be sold through small local grocery shops from which the customers can get them easily. Apart from this we will hire street hawkers who will roam around the city and sell the goods door to door. PET bottles will be stored in warehouse that is close to the facility itself. The sales people will directly contact to the companies that require these bottles for packaging and look for the contracts. In city as stated above that we will have a distribution center, from that center we will distribute to whole sellers.

ADVERTISING & PROMOTION STRATEGY


As I described we are in both B2C and B2B so for this we will use two different promotional strategies. For B2C business we will use flyers that will have full detail of our product range, price, combo offers and discounts. These flyers will circulate through the newspapers across whole city. For B2B business we will promote through online social media and we will also develop our website through which enable us to widely spread our contact among various companies. The site will have full details of product that are available for companies as well as end user.

SALES STRATEGY
The strategy of sales effort will be to convert potential and first time customers into long term customers. Our sales strategy is totally based upon the distribution channel and the pricing strategies. We will have a distribution centre in the city that will take care of sales of household and also supply products to the wholesalers. We will also give the industrial customers a facility to order the products through our website which will help them in reducing the delivery time. To market the products, the Company will use a number of sales agents/brokers. They have a customer base of their own, having developed successful relationships with their client over the years. Their customer base is currently demanding product so they can expand upon their current base. Of course, they will expand that to new customers when product is available. If the Company grows faster than its prime customer base, additional capacity may be developed. We will identify additional prospective customers who can be attracted for our products. 16 |

MARKETING & SALES FORECAST


The first month prior to the opening will be used to get the new office in order, set up appointment and begin marketing activities. In the first month we will focus on the generating public visibility. The sales forecast is based on the assumption that we will sell all of the highest volume PET bottles that we can produce. This flake will be sold to other manufacturing companies. Recycling industry is growing with 15-20% each year. So we can assume that we will grow with at least 20%. There is a continuing strong demand for flake and extruded products made from recycled PET. Sales forecast Year 1 Annual sales Monthly sales PET Sales Household items 1620000 135000 94500 Year 2 2106000 175500 122850 Year 3 2737800 228150 159705 Year 4 3559140 296595 207617

40500

52650

68445

88978.5

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DEVELOPMENT
The development of Hind plastics required accomplishing a series of action and formalities. Since we are new in the market we kept our production is low initially, as demand will increase the production will be enhanced respectively. Now we are recycling and producing only two types of plastics i.e. PVC and PET, as we grow we will produce a wide the range of plastics and its finished product. . The development process involves following steps: Legal formalities Office/business setup Future offerings and expansion plan

Development strategy
In future we are looking for the production of a variety of plastic. These plastics will be LDPE (Low density polyethylene) HDPE (High density polyethylene)

LDPE plastic is used in the production carry bags and other plastic sheets as well as cling wrap, car covers, squeeze bottles, liners for tanks and ponds, moisture barriers in construction. And HDPE plastics are used in production of freezer bags, water pipes, wire and cable insulation, extrusion coating. Our development strategy will base on timely completion of the establishment of the business centre with low execution cost. Our strategy will focus not only the current uninterrupted production of PVC and PET and acquisition of customer as fast as we can, but we will also look for the future expansion plan and execution strategy. Our future development strategy will focus on to chart out a careful plan for the future expansion and growth of our business. The development strategy will address following issue: How will we expand our services? Which are the new areas we will include to provide our services? What will be the format of the business

Our development strategy will address all those above-mentioned point. As we will grow and our earning will increase, we will produce more of PVC and PET as well as expand in new area. We have a development strategy to expand our facility size in order to meet the production size. 18 |

MANAGEMENT
Promoters and six supporting staff will manage the company. There will be five promoters of Hind Plastics. Marketing skills like convincing power, negotiating ability, creating promotional strategies and sales skills will all be extremely helpful in taking the business a long way and will prove intensely valuable to take Hind Plastics to flaring heights. Thus with such potential skills, and other qualities like efficient interpersonal skills, leadership skills and decision making quality, aptly makes him the best promoter and eligible founder and owner of Hind Plastics Along with promoters five more employees will work for the accomplishment of companies objective. One supervisor will work on the facility along with two supporting staff. Supervisor who will work upon the facility does not need to be a chemical engineer a simple technician has experience on working upon the facility can be able to do this.

Job description
Process Sorting Belt Conveyer PET Separator Packaging No of employees 2 1 1 4 Proficiency Unskilled Semiskilled Semiskilled Unskilled

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OPERATIONS
The operations is defined as the process used to deliver your products and service to the customer market place and also include manufacturing transportation logistics travel and after sales services. The facility is located at outside the city. Facility is divided in two parts Recycling and Production unit Warehouse

The facility is located in an area of 3000 sqft. Apart from these two units there will be an office that will look for the perpetual supply of required raw material and also take care about the outbound logistics. The production capacity is 80kg/hr. The operations will be based upon JIT i.e. just in time. We will have contracted with the suppliers who can supply the raw material as quickly as we want. The raw material contains post consumer beverage bottles and other plastic materials. The bottles and other plastic material that can be recycled have a specific sign from which it can be identified that it can be recycled or not. The plastic is then transferred to respective unit to be recycled because PET and PVC cannot be recycled simultaneously due to their different properties. There will be two units running parallel to each other. On unit will recycle and produce PVC plastic and other will perform the same for the PET plastic. The recycled PVC is then moved for the plastic injection-molding unit in the various shapes. Since there are a variety of product is being produced so the preference will be given to that product whose demand is high. All the products will not be produced each and every day. There will be different products that will be produced on different day according to the demand in market. After the recycling process is completed one part of PET flake is moved to the warehouse according to the demand of raw material that different companies need and other part will move for the molding in bottles. The recycled PET flake is then heated and made the viscous solution of it. The PET resin is then feeded to the molder and molder will give it various shape bottles. And then it left for drying. Those products that further need for processing like buckets; the handle will be inserted after the bucket is dried.

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Stages of Recycling and Production


The process of recycling of waste plastics into products of varying usefulness involves the following essential steps: Sizing / Chipping Cleaning Segregation. Agglomerating / Colouring Extrusion / Palletisation Fabrication into end Product.

Chipping
The plastics waste should be properly sized so that those may be fed into the extruders for processing and palletizing. The sizing operation depends on the type and shape of the waste plastics. During this process, attention is required to separate any powdery material from the sized / chipped plastics.

Segregation
Certain polymeric materials are compatible with each other at all proportions. For example LDPE and Lldpe are generally compatible to each other at all proportions. The advanced technology of separating / segregating different types of waste plastics involves Floatation Process. In this process the property of the varying densities of different plastics is made use of for segregating different types of plastics. However in the Indian Context, this separation or segregation process, in many cases, are done by manual process utilizing the availability of cheap and expert labor force. In case the waste is contaminated with embedded metals, proper method of separating the metals / other contaminants is required.

Cleaning
The scale of cleaning depends on the type of waste. Whenever a cleaning operation is involved, it is to be ensured that the water or any other cleaning material used, should be discharged after ascertaining that the discharge does not contain any objectionable substance. A proper Treatment Device may have to be deployed like a water treatment plant / effluent treatment plant. For drying, a suitably designed drier is used. 21 |

Many industries situated outside the metropolises, use open space for natural drying of the cleaned waste.

Agglomerating / Colouring
In the next operation the sized plastics waste is mixed with colour master batch in high-speed mixers / agglomerators and the output is ready for extrusion into pellets.

Extrusion / Palletisation
This is the most important part of the process wherein the sized / chipped plastics are plasticized and granulated to make the plastics material ready for fabrication next. The type and size of the Extruder depend on the type and volume of the plastics waste.

Fabrication into end Product


Finally the reprocessed plastics granules are used as raw material for producing end products using similar fabrication machines like Injection Molding / Extrusion etc., depending upon specific requirement.

Scope of operations
Now presently our production capacity is 200kg/day from which in initial stages we are utilizing around 50% of it. As the business expands we will reach to optimum capacity utilization. We are expecting that we will start producing more advance plastics in the fourth year of our operations and accordingly the sales will increase and the facility will have to be expanded.

Supply chain
In the city there are various small post consumer plastic bottle collectors. To make a continuous supply of raw material we will have four suppliers with us. There will be one permanent supplier that will continuously supply the raw material. In case of excess demand other suppliers will be taken into consideration. Supplier will cover the transportation cost only. The finished product will be stored in the warehouse and according to the demand it will be send to city distribution center. The distribution center will directly sell the finished household plastics as well as to the small shops. Our average daily demand of raw material is 300kg and the lead-time we will keep lead-time of 6hrs. We keep a safety stock of 50 kg. So the reorder point is given by 22 |

Reorder point= average daily uses x lead time + safety stock Reorder point = 300 X .25day + 50 = 125 kg. So at each and every day we will have minimum of 125kg (safety stock+ reorder point) of raw material in our inventory.

This means that when the raw material level reaches to 125kg we will place the next order. The difference time in which we will place the order and receive the order is the lead-time that is 6hrs.

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PROCESS FLOW CHART

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Gantt chart

As it is an assembly line the output of one stage is feeded to the input of next stage. The whole process will run in series format. That is the reason why no parallel process is mentioned in the gantt chart.

FACILITY LAYOUT

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FINANCIALS
The startup cost of our business is as follows: Start-up Requirements Start-up Expenses Legal Stationery Business Cards Initial Mailing Process Funding Office Equipment 6,000 500 500 100 400 2,500 Amount

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Total Start-up Expenses

10,000

Start-up Assets Cash Required Other Current Assets Long-term Assets Total Assets 1,00,000 0 33,30,000 34,30,000

Total Requirements

34,40,000

INCOME STATEMENT The projected income is as shown below it shows that first year we will end up with loss but from second year we will start making profits.
Particulars Net sales Cost of good sales Gross margin Operating expenses: Admin exp. Advertisement Salaries Transportation Maintenance 3000 6000 192000 96000 15000 3150 7200 211200 105600 15750 3308 8640 232320 116160 16538 3473 10368 255552 127776 17364 YEAR 1 1620000 891000 729000 YEAR 2 2106000 1158300 947700 YEAR 3 2737800 1505790 1232010 Year 4 3285360 1806948 1478412

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Electricity Telephone Legal exp. Insurance Rent Other exp

4800 10000 10000 20000 24000 6000 386800

5040 11000 1000 20000 26400 6600 412940 534760 272700 262060 165061 96999 29100 67899

5292 12100 1000 20000 29040 7260 451657 780353 245430 534923 153243 381680 114504 267176

5557 13310 1000 20000 31944 7986 494330 984082 220887 763195 139926 623269 186981 436288

EBITDA less depreciation EBIT Less interest paid EBT tax @ 30% PAT

342200 303000 39200 175550 -136350 0 -136350

BALANCE SHEET
The projected balance sheet of four years is as follows: Sources of Funds Capital Owner's capital Surplus 1930000 -136350 1930000 -68451 1930000 130274 1930000 765287 Year-1 Year-2 Year-3 Year-4

Net worth

1793650

1861549

2060274

2695287

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Long Term loan Loan Current Liabilities Creditors 70500 56722 68066 81680 1417302 1324116 1219111 1100789

Total liabilities Application of fund Plant & M/C Less depreciation

3281452

3242387

3347451

3877756

3030000 303000 2727000

2727000 272700 2454300 300000 2754300

2454300 245430 2208870 300000 2508870

2208870 220887 1987983 300000 2287983

Land Actual Fixed Asset Current Assets: Inventory Bank Debtors Advance to suppliers Investment Total Assets

300000 3027000

97200 10000 147252 0

315900 40000 132187 0

410670 100000 117911 210000

821340 100000 232703 335730 100000

3281452

3242387

3347451

3877756

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BREAK EVEN POINT


VC Amount in Rs FC Admin Other exp Transportation Telephone Wages Carriage inward Power Raw material 6000 96000 10000 119250 238500 119250 414000 Interest Advertisement Insurance Salary Rent Maintenance Depreciation Legal Total Contribution 1003000 617000 Total Amount in Rs 3000 175550 6000 20000 192000 24000 15000 303000 10000 748550

pv ratio

0.3808642

BEP units BEP SALES

1965398.703 15 in months

135000

1.21

In years

As the BEP is 15months it means that at 15th month we will be in a trade off total expenses and revenue.

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APPENDIX Annuity table:


total loan amt.= pmt[1-1/(1-i)^n]/i n is number of years i is interest rate loan amount interest rate annually pmt = 1500000 0.12 21521 ###### ###### 21520.64

month 1 2 3 4 5 6 7 8 9 10 11 12 13 14 31 |

EMI 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521

Interest 15000 14935 14869 14802 14735 14667 14599 14530 14460 14389 14318 14246 14173 14100

principle 6521 6586 6652 6718 6785 6853 6922 6991 7061 7132 7203 7275 7348 7421

balance O/S Annual interest 1493479 1486894 1480242 1473524 1466738 1459885 1452963 1445972 1438911 1431780 1424577 1417302 1409954 1402533 175550

15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37

21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521

14025 13950 13875 13798 13721 13643 13564 13485 13404 13323 13241 13158 13075 12990 12905 12819 12732 12644 12555 12465 12375 12283 12191

7495 7570 7646 7722 7800 7878 7956 8036 8116 8198 8279 8362 8446 8530 8616 8702 8789 8877 8965 9055 9146 9237 9330

1395038 1387468 1379822 1372099 1364300 1356422 1348466 1340430 1332313 1324116 1315836 1307474 1299028 1290498 1281882 1273180 1264391 1255515 1246549 1237494 1228348 1219111 1209782 153243 165061

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38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60

21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521

12098 12004 11908 11812 11715 11617 11518 11418 11317 11215 11112 11008 10903 10797 10689 10581 10472 10361 10250 10137 10023 9908 9792

9423 9517 9612 9708 9805 9903 10003 10103 10204 10306 10409 10513 10618 10724 10831 10940 11049 11159 11271 11384 11498 11613 11729

1200359 1190842 1181229 1171521 1161716 1151812 1141810 1131707 1121504 1111198 1100789 1090277 1079659 1068935 1058103 1047164 1036115 1024955 1013684 1002300 990803 979190 967461 124920 139926

33 |

61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83

21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521

9675 9556 9437 9316 9194 9070 8946 8820 8693 8565 8435 8304 8172 8039 7904 7768 7630 7491 7351 7209 7066 6922 6776

11846 11964 12084 12205 12327 12450 12575 12701 12828 12956 13085 13216 13348 13482 13617 13753 13890 14029 14170 14311 14454 14599 14745

955615 943651 931567 919362 907035 894584 882010 869309 856481 843526 830440 817224 803876 790394 776777 763024 749134 735104 720935 706624 692169 677570 662825 108010

34 |

84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106

21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521

6628 6479 6329 6177 6024 5869 5712 5554 5394 5233 5070 4906 4740 4572 4402 4231 4058 3884 3707 3529 3349 3167 2984

14892 15041 15192 15344 15497 15652 15809 15967 16126 16288 16450 16615 16781 16949 17118 17290 17462 17637 17813 17992 18172 18353 18537

647933 632892 617700 602356 586859 571207 555398 539432 523305 507018 490567 473952 457171 440222 423104 405814 388352 370715 352901 334910 316738 298385 279848

88957

67486

35 |

107 108 109 110 111 112 113 114 115 116 117 118 119 120

21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521 21521

2798 2611 2422 2231 2038 1843 1647 1448 1247 1044 840 633 424 213

18722 18909 19098 19289 19482 19677 19874 20073 20273 20476 20681 20888 21097 21308

261126 242216 223118 203829 184346 164669 144795 124722 104449 83973 63292 42404 21308 0 16031 43293

BIBLIOGRAPHY Crisil report on plastic industry Plastic waste option for small scale recourse recovery by Inge Lardinois Small scale recycling of plastic by- Jon Vogler

36 |