N

E

E

D

S

PROJECT REPORT ON

MANUFACTURING OF CORRUGATED

BOXES

SUBMITTED

AS A PART OF REQUIREMENT OF THE TRAINING

UNDER

NEW ENTREPRENEUR CUM- ENTERPRISE DEVELOPMENT

SCHEME

GOVERNMENT OF TAMILNADU

CONDUCTED BY

ENTREPRENEURSHIP DEVELOPMENT INSTITUTE,

GUINDY,CHENNAI

PREPARED BY

K. VANITHA

ADDRESS: NO.17, KAVARA STREET, MAPPADUGAI

MAYILADUTHURAI NAGAPATTINAM DIST. -600003

MOBILE: 9884050644

E MAIL ID: omsakthiindustries2013@gmail.com

TRANNING AT

Krishnasamy College of Engineering and Technology

Cuddalore - 607 109

FINANCED BY

ANDHRA BANK,

MOOVALUR BRANCH,

MAYILADUTHURAI-600 003

TABLE OF CONTENTS

SNO DESCRIPTION

1 EXECUTIVE SUMMARY

2 PERSONAL DETAILS

3 PROJECT REPORT

4 QUOTATION OF CORRUGATION MACHINE

5 FINANCIAL INSTITUTION LOAN APPROVAL LETTER

6 BUSINESS PLAN SOFTWARE DEVELOPED BY EDI

7 MSME REGISTRATION CERTIFICATE

8 TIN AND CST REGISTRATION

9 FIRM REGISTRATION AND PARTNERSHIP REGISTRATION

10 PAN REGISTRATION IN THE NAME ORGANISATION

11 DIAGRAMATIC REPRESENTATION OF THE SURVEY AND TABLE

12 CONCLUSSION OF THE MARKET SURVEY

EXECUTIVE SUMMARY

1. Name of the Company : OM SAKTHI INDUSTRIES

2. Constitution : PARTNERSHIP FIRM

3. Promoter(s) : V. TAMIL SELVAN

K.VANITHA

4. Address : 110, SOZHIA STREET,

SITHARKADU,

MAYILADUTHURAI -609003

5. Size of the Plot : 12000 sq.ft.

6. Location : 110, SOZHIA STREET,

SITHARKADU,

MAYILADUTHURAI -609003

7. Covered Space : 5000 sq.ft.

8. Proposed Project to : Corrugated Boxes

be set-up

9. Type of Industry : Paper Packaging

10. Major Raw Materials : Kraft Paper, Gum, Wire,

Ink etc.

11. Employment Potential : 12 Persons

12. Power Load : 60 KW

PROJECT REPORT

C O N T E N T S

________________________________________________________

CHAPTER NOS. PARTICULARS SHEET NOS.

________________________________________________________

I. Project Summary

II. Introduction

III. About the Promoter(s)

IV. Product Description

V. Market Potential

VI. Manufacturing Process & Process Flow Chart

VII. Economics of the Project

Covering:-

Basis & Presumptions

Product(s) Mix,Capacity & Its Utilisation

Building & Structures

Plant, Machinery & Equipment

Total Cost of the Project

Means of Finance

Term Loan, its repayment & interest schedule

Working capital & margin money

Projections of Performance & Profitability

Projected Balance Sheet

Cash flow Statement

CHAPTER - I

PROJECT SUMMARY

1. Name of the Company : OM SAKTHI INDUSTRIES

2. Constitution : PARTNERSHIP FIRM

3. Promoter(s) : V. TAMIL SELVAN & K. VANITHA

4. Address : 110, SOZHIA STREET, SITHARKADU,

MAYILADUTHURAI -609003

5. Size of the Plot : 12000 sq.ft.

6. Location : 110, SOZHIA STREET, SITHARKADU,

MAYILADUTHURAI -609003

7. Covered Space : 5000 sq.ft.

8. Proposed Project to be set-up : Corrugated Boxes

9. Type of Industry : Paper Packaging

10. Major Raw Materials : Kraft Paper, Gum, Wire, Ink etc.

11. Employment Potential : 12 Persons

12. Power Load : 60 KW

CHAPTER - II

INTRODUCTION

Corrugated Box is the most popular shipping container, now-a-days. The boxes find their

number of applications in the packaging of chemicals & drugs, tobacco, engineering goods,

canned & bottled goods, food products, lamps, electrical appliances, glasswares etc.

This project profile is prepared basically to give a preliminary idea regarding various aspects

of this project in a nutshell.

The various points discussed in this Detailed Project Profile include:

1) Market potential in terms of past trends and/or end-use pattern.

2) Estimates of requirements and cost of land, building and other civil works.

3) Estimates of requirements of plant & machinery, know-how other

Miscellaneous assets, their costs and availability etc.

4) Requirements of raw materials - indigenous and imported, their

availability and costs and other inputs such as water, fuel, power etc.

5) Manpower requirements and employment potential.

6) Estimates of administrative and factory overheads.

7) Estimation of cost of project and means of financing.

8) Estimates of cost of production and profitability analysis.

9) Estimation of break-even point etc.

The study establishes technical feasibility and economic viability of the project. Ensuing

sections of this report discuss various aspects of this project.

CHAPTER – III

ABOUT THE PROMOTER(S)

The promoter of the proposed unit is highly educated, financially sound and possess rich

experience in the same field. After thorough study of the market demand of the project, he is

keen to set up a manufacturing unit for the same.

B I O – D A T A

Name : V. TAMIL SELVAN

Father’s Name : VEERAPPAN

Date of Birth/Age : 20/05/1970 / 43 Years

Address, residence : 151, VANDIKARA STREET, SITHARKADU,

MAYILADUTHURAI, NAGAPATTINAM-DIST.

Qualification : I.T.I.

Experience : 7 YEARS

B I O – D A T A

Name : Mrs. K. VANITHA

Father’s Name : N. KRISHNAMOORTHI

Date of Birth/Age : 19/07/1977 / 36 Years

Address, residence : No.17, KAVARA STREET, MAPPADUGAI,

MAYILADUTHURAI, NAGAPATTINAM-DIST.

Qualification : M.A.

Experience : 5 YEARS

CHAPTER - IV

PRODUCT DESCRIPTION & APPLICATIONS

Introduction

Corrugated Box is the most popular shipping container, now-a-days. The box is

manufactured from corrugated board which consists of 3 or more layers of kraft paper. The

middle fluted layer is pasted with two flat parallel sheets of paper. The boxes find their

number of applications in the packaging of chemicals & drugs, tobacco, engineering goods,

canned & bottled goods, food products, lamps, electrical appliances, glasswares etc.

Packaging plays a very important role in the country's economy. Till recently only the

western world, more particularily the developed countries cared about proper packaging.

However, now even developing countries like India have changed their outlook towards

packaging and in the last few years increasing stress has been laid on improved and proper

packaging. In fact, today, packaging is as important as the contents.

Corrugated boards were first produced in India in early fifties. Since then the

production of Corrugated boards has increased steadily. Corrugated boxes have replaced

wooden boxes & crates in many applications. Today, about 80% of all shipments in the world are

being made in fibre board boxes. In India, about 60% of the packaging is being done with

corrugated fibre board boxes.

Corrugated Board:-

Corrugated fibre board consists of a flat layer of paper sheet (liner) glued on one or

both sides of a corrugated paper (medium). The corrugated board is made by passing two

layers of paper (usually kraft) through corrugating machine. One layer of paper becomes

corrugated after being passed thro' the heated rolls and other is brought into contact with it

after the former having glued at tips.

The corrugating 'medium' is generally made from a 0.009" thick (9 caliper) or 0.23 mm.

The glue frequently used is starch or silicate of soda adhesive. When only one liner is used, the

product is known as "Single face" or "two ply" board. This board is flexible in one direction.

When the corrugated medium is combined on both sides with flat sheets, it is known as double

faced or "3-ply board".

Advantages of Corrugated Fibre Board Boxes :-

Corrugated fibreboard boxes have replaced the wooden and tin containers due to their

several advantages for safe transportation of the goods. These are discussed here under :

1) Light in weight (freight advantage)

2) Cellular structure with high compressive strength, resiliency & shock resistance. Assured

safety to delicate articles.

3) Can be stored conveniently in folded condition when not in use, thus saving storage

space.

4) Can be attractively printed, thus advertising

advantage.

5) By lining, lamination or coating, they can be made water resistant and resistant to other

adverse conditions.

6) Easy to fabricate.

7) Contents packed in these boxes remain dust free.

8) Available through out the year. .pa

9) Expedites production due to one line conveyor packing.

10) Re-usable

11) No strapping necessary

12) Desired in export market

13) Eliminated dependency on natural wood.

Applications:-

Corrugated fibre board boxes are being used for the packing of industrial as well as

consumer goods. They are used for packing of chemicals, drugs, tobacco, engineering

goods, canned and bottled goods, food, electrical appliances, confectionary, textiles,

fruits, vegetables, potteries, footwear, glasswares and other fragile items, medical

instruments, photographic equipments and a number of other products.

The use-pattern of corrugated board containers is approximately as follows :-

(%)

Chemicals & Drugs 20

Tobacco 20

Engineering Goods 10

Canned & bottles goods 10

Light Engg.Products & Lamps 8

Electrical products 5

Confectionery 3

Textiles 2

Other (including fruits,

potteries etc.) 22 _____________

100

_____________

Some of the products where corrugated fibreboard boxes find extensive application are:-

1. Pharmaceuticals.

2. Glassware, crockery ware

3. Soaps & Cosmetics

4. Biscuits

5. Hosiery & ready made garments

6. Electronic products

7. Breweries

8. Cigarettes

9. Footwears

10. Toys

11. Milk products & other food items

12. Tea & Coffee

13. Automobile components

14. Rubber & rubber products

15. Engineering items and consumer durable like

refrigerators, TVs, Air Coolers, fans etc.

16. Stationary items

17. Match boxes

18. Frozen fish

19. Apple, cherry, grapes etc.

20. Cashew nut industry

It would not be an exaggeration if one states that practically every product at some or the

other stage, has to be packed in corrugated paper board or box. Usually, at the

manufacturer/wholesaler’s level the individual units of a particular item are packed together in a

carton/corrugated box for the sake of convenience in handling/transporting.

The strength or weakness of corrugated paperboard depends upon the member of ply,

which vary from 2 ply to 9 ply. The higher the member of the ply, the thicker and stronger will be

the board. However, the strength required will depend upon the purpose for which the corrugated

board/box is to be used. For example, to pack vials and tubes, a thinner quality or lesser ply

corrugated board would serve the purpose, while packing of a television set or an air-conditioner

will require a very sturdy corrugated box with maximum ply. Similarly for electric lamps, a 2 ply flexible board is used.

The unit shall manufacture corrugated boxes of varying plys to suit various needs.

Indian Standard Specifications:-

Bureau of Indian Standards (earlier known as Indian Standard Institute, ISI) has published

following Indian Standards on the industry:-

1. 2771 Fibre-board boxes

Part-1 Corrugated Fibre Board Boxes

Part-2 Solid fibre board boxes

2. 10066 Corrugated fibre board boxes for packing of Cigarettes.

3. 11844 Corrugated fibre board boxes for transport packaging of

apples.

4. 7151 Corrugated fibre board boxes of Internal dimensions 890 x

380 x 560 mm for para dropping of supplies

5. 7063 Methods of Test for Corrugated fibreboard

Part-1 Thickness of Board

Part-2 Edgewise crush resistance of board

Part-3 Water resistance of glue bond by immersion

Part-4 Determination of substance of the component papers after

seperation.

However, for complete up-to-date information, it is advised to contact Bureau of Indian

Standards, Manak Bhawan, 9-Bahadur Shah Zafar Marg, New Delhi-110002.

CHAPTER - V

MARKET POTENTIAL

The paper and paperboard industry has grown over the years to meet the ever-increasing

need for paper as well as paperboard. This industry is more than a century old.

Specific statistics are not available in respect of production in the small-scale sector.

However, an important parameter for gauging the market potential for the products envisaged in

this scheme is to ascertain the overall growth in the economy in general with particular reference

to the growth of user industries that require corrugated board/boxes.

A look at the user industries indicates that they have generally grown over the years and

as per indications will continue to growth in the coming years as well.

Consequently, the demand for corrugated paper board/boxes will also continue to be

buoyant. A peculiar feature of this industry is that on the one hand there are several units in the

large as well as small-scale sectors, which are sick and unable to function properly, while on the

other-hand several units are flushed with orders and are working to capacity.

An important factor for successful undertaking of corrugated paper board/boxes is the

capacity to procure orders from bulk users on contract basis. Only large and regular orders will

ensure stability to the unit.

Through the market potential for these products can be considered to the fairly good, much

will depend upon the marketing strategy adopted by an individual entrepreneur

CHAPTER - VI

MANUFACTURING PROCESS

The process of manufacture of corrugated fibreboard & boxes is quite simple. The unit

mainly comprises of two sections viz. corrugated board making and box making section.

MANUFACTURE OF CORRUGATED BOARD

Corrugated board is made of a corrugated paper sheet of paper glued to the facings of flat-

paper, usually kraft. A corrugating machine is employed for the corrugation of flat sheet and

preparation of corrugated flexible 2 ply board. The machine is called as single-face corrugating

machine. One layer of paper becomes corrugated after passing through the heated fluted rolls and

the other is brought in contact with the former having been glued at the tips. These two sheets

get pasted together and are wound in rolls. The resulting roll is known as single face or 2-ply

corrugated board.

By cutting this roll with board cutter machine; glueing the corrugated side on pasting

machine & then placing 3rd ply of paper over it, double face or 3-ply corrugated board is

produced. Similarly, board to board can be pasted to form thicker boards i.e. 5-ply, 7-ply and 9-

ply boards.

MANUFACTURE OF BOXES

The corrugated board produced as above is dried (for drying of glue) and may now be

processed further to produce-corrugated boxes.

The size of a box is always given in terms of the inside dimensions, with the longer

dimension (length) of the opening given first followed by width and depth. The most

economical box for a given cubic contents has the proportions of 2:1:2 (L:W:D). However,

other proportions may also be used. For manufacturing boxes of any particular dimensions, it

is first decided as to how the blanks for the boxes should be cut to minimise the wastage.

Calculation of Weight of a Box:-

Weight of the box is equal to area of the sheet multiplied by weight/cu.m. the sheet.

Area of sheet (i) Length of the sheet required, 'a'

= 2L + 2W + 2 inches.

(ii) Width of the sheet required 'b'

= W + H

Where L = Length of the box

W = Width of the box

H = Height of the box

2" is the stitching margin.

Weight/sq.m. of sheets :

It will depend upon the number of plies & g.s.m. (grams/sq.m.) of paper. For the

corrugating media, on an average 45% extra material is consumed compared with the plain

one depending upon the size of flute. So, weight per sgm. of a 3 ply board would be as follows :-

gsm of top liner +(1.45 x gsm of media) + gsm bottom liner.

Fabrication of Boxes:

The various steps involved in the fabrication of corrugated fibre board boxes are:

Slitting & creasing; slotting; flap or corner cutting and stitching or gluing. simultaneously

carried over a rotary cutting & creasing machine. The trimmed and creased sheet is slotted

and flap out on an eccentric slotter. Finally, it is either stitched using stiching machine or

glued/taped manually. The boxes are shiped in the form of flat tube which is set up and

closed by the packer.

Printing:

There are different methods of printing the corrugated boxes. Some of the small scale

manufacturers are printing the boxes after fabrication, by the technique of screen printing.

However, printing can be done in a printer slotter machine. In this machine, the blanks are

printed using soft rubber dies and the body score or vertical score and slots are introduced in the

board.

Printing can also be performed on the paper sheet, before making corrugated

sheet/board. The layer of paper which will come outside of the box, is printed on

flexographic machine.

PROCESS FLOW CHART

Corrugated Sheets Corrugating Plant

|

|

V

Printing

|

|

V

Printed Paper Sheets

|

|

V

Cutting Board Cutter

|

|

V

Glueing (at tips) Sheet Pasting Machine

|

|

V

3-ply board

|

|

V

Cutting Cutting & Creasing Machine

|

|

V

Creasing

|

|

V

Slotting Slotter

|

|

V

Stitching Stitching Machine

|

|

V

Finished Product

CHAPTER - VII

ECONOMICS OF THE PROJECT

a. Basis & Presumptions:-

No. of working days/year : 300

No. of shifts/day : Single

No. of working hours/shift : 8

b. Product(s) Mix,Capacity & Its Utilisation:-

Finished Product(s) : Corrugated Kraft Paper Boxes

Average Selling Price : Rs.37,000 per ton

Annual Installed Capacity : 750 tons

Capacity Utilisation :

First year of operation : 50 %

Second year of operation : 60 %

Third year of operation : 70 %

Forth year of operation : 80 %

Fifth year onwards years

of operation : 90 %

c. Cost of Building & Structure:-

a. Works : 3000 Sq ft.

b. Stores : 1500 sq.ft.

c. Office : 500 sq.ft.

Total : 5000 sq.ft.

: Rs. 9.00 Lakhs

d. Plant & Machinery:-

Following plant, machinery and equipment are required for the proposed project:-

_____________________________________________________________

S.No. Description Qty. Rate Amount

(Nos.) (Rs.Lakhs)

_____________________________________________________________

A. Corrugating Unit

1. Single Face Corrugating M/c 1 8.75 3.00

2. sheet cutter 1 2.75 2.75

3. Board Cutter, 62” x 62” 1 0.90 0.26

4. Sheet Pasting Machine 1 1.20 1.20

5. 4-Bar Rotary Cutting&Creasing M/c, 1 2.70 2.70

6. Eccentric Slotter, 1 2.90 2.90

7. Stitching Machine, 1 0.66 0.66

8. pressing machine 1 1.50 1.50

9. flexo Printing M/c1 1 5.57 5.57

10. variable frequency drive 1 1.05 1.05

11. Gen Set, 50 KVA 1 4.25 4.25

e. Total Project Cost:-

a. Building & Structures : 9.00

b. Machinery & Equipments : 33.62

c. Margin Money for

Working Capital : 2.37

__________________

Total : Rs. 45.00 Lakhs

__________________

f. Means of Financing of the Project:-

a) Term Loan from Bank/

Financial Corporation : 32.00

b) Promoters’ Contribution : 2.35

including Unsecured Loans

from friends/relatives

c) Subsidy from Government : 10.65

__________________

Total : Rs. 45.00 Lakhs

__________________

Promoters’ Share to Project Cost : 5%

g. TERM LOAN, ITS REPAYMENT AND INTEREST SCHEDULE :

Term Loan : Rs.32.00 Lakhs

Repayment Period : 5 Years

Moratorium Period : 12 months

Annual Interest Rate : 12 % p.a.

h. FINANCUIAL ANALYSIS

1. Turnover (per year)

Corrugated boxes per month Rs.1000000/-

Per Annum Sales 1000000 X 12 : 12000000/-

2. Net Profit PerAnnum

Total Sales income 12000000

Less Total expenses 11420318

-------------

Net Profit 5,79,682

-------------

3. Net Profit Ratio

= Net Profit x 100

Turn over per year

= 579682 x 100 = 4.83%

12000000

4. Break Even Point

= Fixed Cost x 100

Fixed cost + Profit

= 788209 x 100 = 57.62%

788209+579682

Market Survey on Corrugated boxes Manufacturing

1. What kind for packing you are using to pack your finished components?

(a). Wooden box (b). Corrugated box (c) Steel box

2. If you are using Corrugated boxes, what quality of boxes you are using in your company?

(a). Non – virgin (b). Semi – Virgin (c). Virgin

3. What kind of boxes you are using?

(a). 3 – Ply (b). 5 – Ply (c). 7 – Ply

4. Do you want to integrate more components with the same model of boxes you are currently using, with effective

price?

(a). Required Immediately (b). Not Required (c). May require in future

5. Mention the type of problem you are facing in the boxes which presently you are using, as mentioned below.

(a). Box bulging due to improper pasting (b). Bubbling due to uneven pasting (c). Damage of boxes

due to usage of lower GSM paper.

6. What kind of improvement do you expect from your Supplier?

(a) On time delivery (b) Best Quality (c) Credit Terms (d) Avoid Abundant

Space usage

7. Mention the purchase of carton boxes per month in value as given below.

(a) Below 1 Lakhs (b) 1 to 1.5 Lakhs (c) 1.5 to 2 Lakhs (d) Above 2 Lakhs

8. What is the rating do you give to your current supplier based on their performance

(a)Excellent (90% to 100%) (b) Good (80% to 90%) (c) Better (70% to 80%)

(d) Poor(Below 70%)

9. Kindly Share the points which you expect from a carton box supplier…

………………………………………………………………………

10. If we tend to satisfy your ENHANCED needs , Can we have a opportunity to prove ourselves….?We have a chance

(b) We may have a chance in future (c) No chances

1. What kind for packing you are using to pack your finished components?

(a). Wooden box O (b). Corrugated box O (c) Steel box O

S.no -- 1

Non Virgin A 10 Semi virgin B 28 Virgin C 2

2. If you are using Corrugated boxes, what quality of boxes you are using in your company?

(a). Non – virgin O (b). Semi – Virgin O (c). Virgin O

S.no -- 2 Non Virgin A 4

Semi virgin B 22 Virgin C 14

3. What kind of boxes you are using?

(a). 3 – Ply O (b). 5 – Ply O (c). 7 – Ply O

S.no -- 3 3 - Ply A 4

5 - Ply B 28 7 - Ply C 8

4. Do you want to integrate more components with the same model of boxes you are currently using, with effective price?

(a). Required Immediately O (b). Not Required O (c). May require in future O

S.no -- 4 Required A 32

Not Required B 2 May be in future C 6

5. Mention the type of problem you are facing in the boxes which presently you are using, as mentioned below.

(a). Box bulging due to improper pasting O (b). Bubbling due to uneven pasting O

(c). Damage of boxes due to usage of lower GSM paper.

S.no -- 5 Box Bulging due to

improper pasting A 16 Bulging due to un

even pasting B 14 Damage of box C 10

6. What kind of improvement do you expect from your Supplier?

(a) On time delivery O (b) Best Quality O (c) Credit Terms O (d) Avoid Abundant Space

usage

S.no -- 6 On time delivery A 11

Best quality B 15 credit terms C 2 Space usage D 12

7. Mention the purchase of carton boxes per month in value as given below.

(a) Below 1 Lakhs O (b) 1 to 1.5 Lakhs O (c) 1.5 to 2 Lakhs O (d) Above 2 Lakhs

S.no -- 7 Below 1 Lakh A 21

1 to 1.5 Lakhs B 9 1.5 to 2 Lakhs C 7 Above 2 lakhs D 3

8. What is the rating do you give to your current supplier based on their performance

(a)Excellent (90% to 100%) O (b) Good (80% to 90%) O (c) Better (70% to 80%)

(d) Poor(Below 70%) O

S.no -- 8 Excellent A 4

Good B 12 Better C 17 Poor D 7

9. If we tend to satisfy your ENHANCED needs , Can we have a opportunity to prove ourselves….?

(a) We have a chance O (b) We may have a chance in future O (c) No chances O

S.no -- 9 We have a chance A 24

We may have a chance in future B 14

No chances C 2

Conclusion : We have got all kind of information from this market research. Customers are facing different kinds of hindrances, so we keep in mind to rectify the same at the time of productions.

Most of the Customers require good quality, competitive prices and on time delivery with good services.

We will comply the customer's expection/satsifaction to achieve our Vision & Mission.

A B C D

Usage of carton boxex 74 16 8 2

Requirement of integration 80 14 5 1

Customer Expectation 30 38 5 27

Rating 42 30 18 10

Ready to give opportinity 60 35 5 0

Average 58 26 8 8

CONCLUSION

Our Mission and Vision to achieve 100% success in this Project. Because we are the monopoly in our Districts and our surroundings. we will comply to our customers with our best products and services. Because Customer satisfaction is our motto. Within few years we will step into the Overseas business through our product.