Business Plan Egg Tray Making in Nigeria

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Project Proposal submitted by

Business Plan for

Manufacturing EGG TRAY

from Waste Paper

650 Trays/Hr (30 Cavity Tray)

or 15,000 Trays/Day

in

Nigeria

Submitted by : Onella Consulting Pvt Ltd, India



1. Products Planned and Capacity

Egg Tray

2. Process Description and Production Flow Chart

3. Equipment List and Specifications

4. Plant Details

5. Project Details

6. Project Financials



1. Products Planned, Capacity Planned and Production Details

Egg Tray:

The project involves converting waste paper into useful products like egg trays that are

salable and is in demand. A sophisticated machine, Paper Pulp Moulding System for Egg

Trays (Egg Filler Flats) is used for making Egg Trays.

The machine is capable to manufacture different size and shapes for Trays. Some of the

designs for Egg Trays are as follows:

6 Cavity Egg Tray

30 Cavity Egg Tray

18 Cavity Egg tray



Colour Egg Tray

The plan would be capable for products of all the above products. The Project is planned with the capacity of 650 Trays/Hr. The plant is designed for 24hrs working. The plant is capable for production of about 15,600 Trays/Day @100% Capacity. The actual production, which can be achieved is as follows: For all the Projection, we have assumed Production of Egg Trays with 30 Cavities.

Daily Production Details: Year 1 Year 2 Year 3 Year 4 Year 5

Capacity Utilization 75% 80% 85% 85% 85%

Daily Production Units

Egg Trays (Nos) 11,700 12,480 13,260 13,260 13,260

Yearly Production Details

Year 1 Year 2 Year 3 Year 4 Year 5

Capacity Utilization 75% 80% 85% 85% 85%

Yearly Production Units

Egg Trays (Nos) 3,861,000 4,118,400 4,375,800 4,375,800 4,375,800

Working Days in Year assumed as 330 Days. The plant is capable for working more than 350 Days/Year. Sales Price is assumed as Naira 40/ Pcs Ex Factory, although the Sales Price is more than this.



2. Process Description and Production Flow Chart

Manufacturing Process of Egg Tray Making

Waste Paper, even the lower grades is converted into pulp of 4 % consistency in a critically

designed Hydrapulper. The pulp so formed in the Hydrapulper flow through a pulp screen

and a vibrator before being discharged to a pulp hold. Here wax, alum etc. are added and

diluted to about 1% consistency under constant agitation. The same is then pumped into an

overhead pulp tank with special agitator and discharge section. The pulp by gravity flow

enters the Moulding unit and overflows. The forming mould gets filled with the pulp which

is sucked through the surface of the mould by vacuum pull which leaves a fill of solid paper

fibre in the shape of the mould. The transfer mould gives a puff of controlled compressed

air uniformly, to discharge the wet tray and drop it to the prepositioned pallet for inline

Dryer. After Dryer the tray moves to compacting machine through conveyor.



3. Equipment List and Specifications

EQUIPMENT DETAILS AND DESCRIPTION

S. No ITEM

NAME

DESCRIPTION PHOTO QTY

1 Hydrapulper Heavy duty construction in Mild Steel with rust preventive coating. The cutter is made of SS to ensure uniform and aggressive pulping with less input of power and time. Fitted with suitable AC motor with drive pulley and belt.

1 No

2 Agitator This assists to maintain uniform consistency of pulp in the storage tanks

1 No

3. Vibrator

Screen

This assists to screen possible impurities like metal, plastic, wood etc. Driven by suitable AC motor

1 No

4 Vacuum pump With motor, Water separator Tank & water Pump

This is used to create vacuum to suck the water from the moulds. Fitted with suitable AC motor complete with pulley and belt

1 No

5 Pulp Lifting

Pump

This pump is used to lift the pulp from the tank to the moulding machine and back. Driven by a suitable AC motor.

No Picture

1 No

6. Valves &

Piping

To Control the process and to Transport the pulp and water

No Picture

1 No



B. Forming Section:

S.

No

ITEM NAME DESCRIPTION PHOTO QTY

1 Reciprocating Moulding machine

This machine is used to make pulp moulded products using relevant moulds from the pulp. Reciprocating Moulding machine complete with pulp tank and with PLC controlled user-friendly control panel.

1 No

2 Standard size 30-cavity Egg tray mould set consisting of 4 Nos of forming moulds and 4 Nos. of transfer

moulds

To produce 30-cavity egg trays of standard size

1 Set



C. DRYING SECTION

S.

No


1 On Line

Dryer

On-Line conveyorised Drier with Multi-pass movement to save energy, space, fuel consumption etc. Fitted with suitable drives and supplied with suitable control panel. Provided with insulated walls to conserve maximum possible heat energy

1 No

2 Gas heating System

To supply heat to the drying chambers by heating the air using Gas as fuel

1 No

3. Finished Product Delivery Conveyor

To deliver the dried product from the Drier to Packing section.

1 No

D. PACKING SECTION

S.

No


1 Compacting

Machine

To Press and compact the finished trays to save shipping space

1 No

4. Plant Details:



The plant is designed for continuous 3 Shift working. The plant is designed with required automation keeping Nigeria conditions in mind.

The plant is designed with all the required accessories and utility equipments for continuous working.

Total Building Required : 400 - 500 Sq. Mtrs

Recommended Space Required for complete Factory : About 300 Sq Mtrs

(Machine Length 30 Feet, Width 25 Feet and Height 15 Feet) Total Electricity Required : About 125- 150 KW

The Generators are planned with for Backup generators.

The complete Electricity Network is planned with following options:

a. Electrical Connection from NEPA

b. Backup Generation using Diesel Generators

Total Employment Generation

Total Workers : About 20

Engineers and other Staff : About 5



Engineering Drawing and Technical Support

We would offer the following services:

a. Complete Engineering Services for complete plant including

i. Building Drawing

ii. Complete Engineering Service Drawings

iii. Project Engineering Services iv. Project Management Services b. Technical Services include

i. Plant Layout

ii. Utility Layout

iii Utility balancing

iv. Technical know how for Production

v. Man Power Training

We can also arrange the following Expats for:

1. Plant In charge

2. Production In charge

3. Production Planning & Control

4. Production Managers for each Section

The expats would be coming as Employees of the company on contract.



Commercial Details: Cost of Plant, Service Utility, Freight Cost Installation and other Cost:

S.No Description Qty Total Amount (USD)

1. Egg Tray Making Plant 1

(As per details given Above) TOTAL 180,000

Cost of Utility Services and Equipments:

S.No Description Nos Total Amount (USD)

1 Power Plants (NEPA Substation, Diesel Generators) 1 Set 2 Electrical Set up Including Distribution Panels, Wires,

Cables, Earthing, Indoor Lighting, Outdoor Lighting 1 Set

3 Pumps 1 Set 4 Piping 1 Lot 5 Compressor 1 Nos 6 Weighing Scales 1 Lot 7 Others Misc equipments 1 Lot 8 Fire Fighting 1 Set

Total Utility USD 45,000

Total FOB Cost of Plant, Utility & Services 295,000 Freight Cost (Lagos Port) Total 3 Containers 15,000 Total Installation Cost Including Cost of Travel, Cost

of Expert, Supervision Cost, Visa Fee etc (Local Lodging and Boarding Expenses to be borne by client)

10,000

Total Installed Cost (USD) 250,000



6. Project Financials Estimated Calculation of Building:

The Building required is about 300 Sq Mtrs and can be taken on lease. We have assumed cost of lease of about Naira Million 5.00 in 1st year with increase of 15% yearly.

Estimated Project Cost S No Description Million Naira 1 Plant & machinery 57.64 2 Pre-operative expenses 5.90

3 Contingent expenditure 6.35 4 Working capital (1st year) 5.15

Total Project cost 75.05

Project Highlights: Details

Break-even point (3rd Year) 37% Debt service coverage ratio 4.91

Internal rate of return 42%

Pay-back period (Years) 1.30 Interest rate - Term Loan 21%

Promoters Contribution 33%

If you take loan from India the cost would be much cheaper



Estimated Machine Prices:

Particulars No. of M/cs

BASIC COST

Total Cost USD

Currency EX-RATE

NET COST

Egg Tray Making Plant 1 250,000 250000 USD 200.00 50.00 Sub Total 1 250000 50.00

Total 50.00

Total of Imported Plant and Machinery Million Naira 50.00 Add Import Duty, Clearing Expenses, Local Transportation etc.

13.00% 6.50

Total Plant and Machinery Cost 56.50

Calculation of Working Capital:

DESCRIPTION 1st Year

No. of Months Required

Amount Required

STOCK OF INVENTORIES 1. Raw Material -Indigenous 0.15 0.11 2. Consumables -Indigenous 0.25 0.01 3. Stock of Work-In-Progress 0.04 0.16 4. Stock of Finished Goods 0.10 1.29 Sub Total 1.56 SUNDRY DEBTORS 5.Bill Receivable/ Goods in transit 0.20 2.57 Sub Total 2.57 OTHER CURRENT ASSETS/ CONTINGENCIES 6. Utilities 0.25 0.30 7. Labour & Plant Overheads 0.25 0.30 8. Factory Overheads 0.25 0.18 9. Administrative Expenses 0.25 0.18 10. Other Expenses 0.25 0.06

1.02 Total 5.15



Expected Yearly Sales:

Sales of Egg Trays Million Naira Yearly Sales Value Year 1 Year 2 Year 3 Year 4 Year 5 Egg Tray 154 165 175 175 175

Total Sales Value 154 165 175 175 175

Raw Material Required:

Raw Material Kgs/ Year Year 1 Year 2 Year 3 Year 4 Year 5

Capacity Utilization 75% 80% 85% 85% 85% Waste Papers 253,475 270,373 287,271 287,271 287,271

Total 253,475 270,373 287,271 287,271 287,271

Cost of Waste Papers : Naira 35/ Kgs (The Price of waste paper is much less than this price as per our Market Survery) Value in Million Naira Summary Year 1 Year 2 Year 3 Year 4 Year 5 Waste Papers 8.87 9.46 10.05 10.05 10.05 Total Raw Material 8.87 9.46 10.05 10.05 10.05

Total Electricity Cost and Fuel Cost:

Cost of Electricity : Naira 32/ Unit of KWH

Cost of Gas : Naira 65/ Kg

Million Naira

Summary Year 1 Year 2 Year 3 Year 4 Year 5 Capacity Utilization 75% 80% 85% 85% 85%

Cost of Electricity 12.93 13.79 14.65 14.65 14.65 Cost of Fuel 1.28 1.36 1.45 1.45 1.45 TOTAL 14.20 15.15 16.10 16.10 16.10



Estimated Working Results:

Description Year 1 Year 2 Year 3 Year 4 Year 5 75% 80% 85% 85% 85%

a. Cost of Production 46.61 50.15 53.81 54.88 56.09 b. Administrative Expenses -Administrative Salaries 8.40 8.40 8.40 8.40 8.40 - Other Admin. Overheads 1.00% 1.54 1.65 1.75 1.75 1.75 Total Admn. Expenses 9.94 10.05 10.15 10.15 10.15 c. Sale Expenses 5.00% 7.72 8.24 8.75 8.75 8.75 d. Total Cost Production 64.28 68.44 72.72 73.78 75.00 e. Expected Sales Ex-factory 154.44 164.74 175.03 175.03 175.03 f. Gross Profit Before interest 90.16 96.30 102.32 101.25 100.04 g. Financial Expenses -Interest on IC Loan 11.00 11.00 9.00 7.00 4.00 -Bank Charges 1% 0.77 0.82 0.88 0.88 0.88 h. Total Financial Expenses 11.77 11.82 9.88 7.88 4.88 i. Depreciation 6.61 6.61 6.61 6.61 6.61 j. Operating Profit (h-j-k) 71.78 77.86 85.83 86.77 88.55 k. Profit/ Loss before Tax 71.78 77.86 85.83 86.77 88.55 l. Provision for Tax 22.63 25.19 28.29 28.98 29.89 m. Profit after Tax 49.15 52.68 57.54 57.79 58.66 n. Retained Profit 49.15 52.68 57.54 57.79 58.66 o. Add Depreciation 6.61 6.61 6.61 6.61 6.61 p. Add Back Preliminary Expenses - - - - - q. Net Cash Accruals 55.76 59.29 64.15 64.40 65.27



Break Even Analysis:

DESCRIPTION Year 1 Year 2 Year 3 A. Sales Realisation 154.44 164.74 175.03

B.- Raw material 8.87 9.46 10.05 - Consumables 0.51 0.54 0.57 - Bank charges 0.77 0.82 0.88 - Utilities 14.20 15.15 16.10 - Sales Expenses 7.72 8.24 8.75 Total B 32.08 34.21 36.35

C. Contribution (A-B) 122.36 130.52 138.68

D. Fixed costs - Salary & wages 14.36 15.32 16.28 - Factory overheads 8.67 9.68 10.81 - Administrative overheads 8.40 8.40 8.40 - Interest on F/C loan - Interest on R/C loan 11.00 11.00 9.00 - Depreciation & Preliminary Expenses 6.61 6.61 6.61 Total D 49.04 51.01 51.10

BREAK EVEN POINT D/C (%) 40% 39% 37%



Pay Back Period:

DESCRIPTION Year 1 Year 2 Year 3 Year 4 Year 5 A. Investment

1. Total Investment 75.18 2. Less Margin Money 5.28

Net Investment (1-2) 69.89

B. Net Inflows

1. Net Profit after Tax 49.15 52.68 57.54 57.79 58.66 2. Depreciation 6.61 6.61 6.61 6.61 6.61

Total 55.76 59.29 64.15 64.40 65.27

-

Cumulative 55.76 115.05 179.20 243.60 308.87

Pay back period { 69.89 - 115.05 } (45.15)

2.00 + ---------- ------- -------- = --------

{ 179.20 - 115.05 } 64.15

= (0.70)

2.00 + (0.70) = 1.30 Years

Documents

Business Plan Egg Tray Making in Nigeria