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DISPOSABLE SYRINGES
1. Introduction Disposable Syringes are made of plastic material and are used in medical and veterinary science. Due to their availability is sterilized condition, ready to use and cost effectiveness, disposable syringes are fast replacing the age-old glass syringes. Moreover, the horror of AIDS worldwide has almost dispensed with the reuse of syringes and the demand of disposable syringe has increased phenomenally. Disposable syringes are mostly injection moulded from polypropylene. Syringes are available in sizes of i ml, 2ml, and 10 ml, in a variety of designs and consist of either two or three components in their material of construction. The number and size of injection moulding machines required depends upon syringe construction, number of mould cavities and annual production.

2. Market Potential

Disposable syringes have already penetrated the domestic market in a significant way because of awareness created by the Government and other non-governmental organizations on AIDS and Hepatitis-B, thereby insisting on the use of disposable syringes instead of conventional glass type syringes. There is lot of scope in the local market, even if we assume a usage rate of 1 syringe per annum per person, the demand would be of the order of over 102 crores syringes per annum.

Disposable syringes have wide market potential. The age-old glass syringes are fast becoming obsolete. Some of the units manufacturing this product in the country include:

Steryware, Faridabad; Cadila; Dispovan, Faridabad; Cadila hospital product, Ahmedabad; Surgiplus, Ahmedabad; Transplastic Pondicherry; Disposable Mediate, Chennai; Suru Chemicals, Mumbai; Albert David, M.P.; Manoj Surgical, Indore. Some of these units are 100% export-oriented units. In view of the fast expanding market, the prospects of disposable syringes are very bright.

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3. Plant Capacity

The production basis for a typical unit would be as under: Working hours/day: 16 (2 shifts) Working days in a year: 300 Annual Production capacity:

Sl. No. 1 2

Size 2 ml 5 ml

Nos. 100,000,000 55,555,556

Weight 2.5 g 4.5g

Total PP Required (MTPA) 250 250

The unit has been assumed to operate at 80% of its installed capacity in the first and second year, 90% in the third year and 100% capacity from 4th year onwards of its operation.

4. Process, Plant & Machinery (Details & List of Machinery Suppliers) The manufacturing process for disposable syringes consists of the following steps: a. b. c. d. e. f. Moulding of the various components Graduation of the moulded parts Assembling Sterilization Quality Control Tests Packaging

The two essential parts to be moulded include cylinder or barrel of the syringes and the plunger or piston. Injection moulding is suitable for production of large quantity of similar shapes, hence the syringes are injection moulded.

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The Raw material polypropylene is fed into the injection moulding machine and moulded in chilled condition to get better clarity. The moulded syringes are then assembled with the needle in automatic assembly machine (this profile however deals only with the production of the injection moulded component of the syringes). The whole assembly is then sterilized in sterilization plant using ethylene oxide. The completed syringe is thed blister packed in automatic packing machine.

The product should conform to drug control specification and drug license should be obtained for production of this item.

List of the plant & machinery suppliers is as under:

1. DGP Windsor India Limited 5403, SIDC Industrial Estate Place IV, Vatva Ahmedabad

2. Central Machinery & Plastic Products Lojya Estate, Mogra Road Andheri (E) Mumbai-400069

3. M/s. Sunanda Industrial Machinery A Division of Mafatlal Marg Industrial Ltd. 109, Standard House, 83, Maharshi Karup Road, Mumbai-400002.

5. Raw Material & Utilities Requirement.

The main Raw Material required for the project is Polypropylene(PP) while Polyethylene(PE) is required for packaging. PP required would be around 525 MT at 100% capacity utilization. Rubber Gaskets are also required which will be outsourced.

The major utilities required are water, compressed air and power. Water required is around 590 KLPA. and power required is 200 KW.

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6. Land & Built-up Area Requirement Built-

The total land required is 1000 sq.m. and the built-up area is 400 sq.m.

7. Manpower Requirement & Project Implementation Schedule

Staff Production Manager Accountant Chemist Sales Executive Operators Skilled Workers Unskilled Workers Security Total Manpower Required

Nos 2 1 2 2 10 10 10 4 41

Project implementation will take a period of 8 months from the date of approval of the scheme. Break-up of activities with relative time for each activity is shown below:

Sl. No. 1 2 3 4 5 6 7 8 9

Nature of Activities Scheme Preparation and approval Provisional Registration Sanction of Loan Clearance from Pollution Control Board Placement of order for delivery of Machine Installation of Machines Power Connection Trial Run Commencement of Production

8. Project Cost/Fixed Capital Requirement & Means of Finance Requirement

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Period (Month) 0-1 1-2 2-3 2-5 3-4 4-5 6-7 6-7 9 onwards

Land has not been considered as a part of the project cost because it has been considered to be taken on lease (as applicable in Assam). One time Land Development Charges have been considered as part of the project Cost. Also, Special Maintenance Charges and an Annual Service Charge have been considered as part of operating cost. The Total Project Cost is Rs. 395.91 Lakhs as per the table below:

Sl. No. 1 2 3 4 5 6 7

Cost Head Building Machinery Miscellaneous Fixed Assets Preliminary and Pre-Operative Expenses Margin Money for Working Capital Contingency Expenses Land Development Total

Cost (in Rs. Lakhs) 32.00 279.47 8.58 2.00 53.10 18.76 2.00 395.91

The means of finance considering Debt-Equity ratio of 2:1 will be:

Means of Finance Equity Debt Total 9. Working Capital Requirement

Rs. in Lakhs 131.96 263.95 395.91

The Total Working Capital Requirement is as under:

Particulars Net WC Available Bank Finance Margin Money 10. Operating Expenses

Year-1 212.41 159.31 53.10

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Year-2 212.41 159.31 53.10

(Rs. in Lakhs)

Years of Operation Year-3 238.96 179.22 59.74

Year-4 265.51 199.13 66.38

Year-5 265.51 199.13 66.38

The Annual Operating expenses for the first year (70% capacity utilization) are given below: Sl. No. 1 2 3 4 5 6 7 Particulars Utilities Wages & Salaries Interest on term loan Interest on Bank Finance for Working Capital Raw Material Depreciation Maintenance and Service Charges Total Expense (Rs in lakhs) 1.68 23.88 39.59 23.90 491.61 29.93 0.23 610.82

11. Profitability Estimates

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PARTICULARS

Year-1 800 80% 640 832 492 2 10 30 21 53 0.23 607 225 40 24 63 29.9 131 43 88

Year-2 800 80% 640 832 492 2 10 30 21 53 0.23 607 225

Year Year-3 800 90% 720 936 553 2 10 30 23 53 0.23 671 265 25 27 51 29.9 183 60 123

Year-4 800 100% 800 1040 615 2 10 30 26 53 0.23 735 305 16 30 46 29.9 228 75 153

Year-5 800 100% 800 1040 615 2 10 30 26 53 0.23 735 305 8 30 38 29.9 237 78 158

Production/Sales Installed Capacity Capacity Utilization Estimated Production Gross Sales Revenue Expenses Raw Material Consumption Utilities Administrative Overheads Salaries Sales Expenses Loan Repayment Maintenance Charges TOTAL GROSS PROFIT Financial Expenses Interest On Term Loan Interest On Working Capital Sub Total Depreciation Profit Before Tax Profit For Tax Profit After Tax

12. Financial Indicators Indicators

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33 24 57 29.9 138 46 93

(Rs. In Lakhs) The Average Break Even Point for the project is 49%. Year-1 832 30 21 30 2 10 53 40 185 Year-2 832 30 21 30 2 10 53 33 178 Year-3 936 30 23 30 2 10 53 25 173 Year-4 1040 30 26 30 2 10 53 16 167 Year-5 1040 30 26 30 2 10 53 8 159

Sales Realisation Fixed Costs Salaries Fixed Selling Expenses Depreciation(SLM) Utilities (Fixed) Admin. Overheads Loan Repayment Interest On L.T. Loan Total Fixed Costs

Variable Costs Raw Materials Interest On Working Capital Loan Total Variable Costs Contribution Breakeven In % Average BEP

492 24 516 316 58% 49%

492 24 516 316 56%

553 27 580 356 48%

615 30 644 396 42%

615 30 644 396 40%

The IRR for the project is 21%, Average ROI is 60% and the average DSCR is 2.38. (Rs. In Lakhs) Particulars Revenue Profit Before Tax Profit After Tax LT Interest Depreciation LT Loan Repayment Return on Investment (%) Average ROI Debt-Service Coverage Ratio -Debt Service -Coverage DSCR Average DSCR Year-1 832 131.22 87.92 39.59.54 29.93 52.79 51% 60% 92.38 157.44 1.70 2.38 Year-2 832 138.08 92.51 32.73 29.93 52.79 51% Year of Operation Year-3 936 183.23 122.76 24.55 29.93 52.79 60% Year-4 1040 228.37 153.01 16.37 29.93 52.79 69% Year-5 1040 236.55 158.49 8.18 29.93 52.79 69%

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85.52 155.17 1.81

77.34 177.24 2.29

69.16 199.30 2.88

60.97 196.60 3.22