Corrugated box pratik pourkar

PROJECT FEASIBILITY REPORT ON

CORRUGATED BOX MANUFACTURING

PRATIK POURKARMT14IND017

INDUSTRIAL ENGINEERING2014-2015

Introduction

• The packing material of the items depends on the products nature and its usage. Corrugated Kraft Paper Board Box, technically called Corrugated Fibre Board Box is the most popular shipping container, now-a-days. 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.

• 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.

About the Product• Corrugated fibre board consists of a flat layer of paper sheet (liner) glued on

one or both sides of a corrugated paper. The corrugated board is made by passing two layers of Kraft paper through corrugating machine. One layer of paper becomes corrugated after being passed through the heated rolls and other is brought into contact with it after the former having glued at tips.

• 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 • Light in weight (freight advantage)

• Cellular structure with high compressive strength, resiliency & shock

resistance

• Can be stored conveniently in folded condition when not in use, thus

saving storage space.

• Can be attractively printed, thus advertising advantage.

• By lining, lamination or coating, they can be made water resistant and

resistant to other adverse conditions.

• Easy to fabricate.

• These boxes are Re-usable

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 confectionary, textiles, fruits, vegetables, potteries, footwear, glassware, medical instruments, photographic equipments and a number of other products.

22%

22%11%9%6%

3%2%

24% Chemicals and drugs

Engineering goods

Canned and bottles goods

LIght Engg. products and lamps

Electrical products

Confectionery

Textiles

Other (including fruits, potteries etc;)

Distribution of corrugated packaging in India

Technical Aspects• Manufacturing Process Flow

Flat Sheet Single face corrugating

M/c

2-ply corrugated

boardBoard

cutting M/c

Gluing, pasting& sheet pressing

3-ply corrugated

board

Slitting & creasingBox stitching

Manufacture Of Corrugated Sheet

Manufacture Of Boxes

Technical Aspects

Type ofBoard

Max. Mass of contents

Max. combined Dim. L+W+D

Min. Burststrength

Kg mm Kg/cm2

Single walled5 635 6

8 750 8

10 1025 9

•Detailed system

•Quality Standards

As per IS: 2771 (PART I) – 1977 SPECIFICATION FOR FIBREBOARD BOXES

2-ply corrugated board 3-ply corrugated board

Raw Material Study

• Kraft Paper (100,120gsm)

• Adhesives (starch based corrugation glue)

• Water

• Stitching wire (Galvanized steel AISI 304)

• Adhesive Tape

• Binding Cloth

Raw Material Study• Kraft Paper suppliers (100,120 gsm, B/F 10)

R. A Kraft Paper PVT. LTD. Madhyadesh Papers Limited

502 Suryakiran Complex Nava Baharat Bhavan, Chhatrapati

1, Bajaj Nagar Nagpur-440010 Sq, Wardha Road Nagpur-440015

• Stitching Wire

Precision alloys Private Ltd.

301, Siddhachal Sabkuchh, Link Road

Mumbai-440064

• Adhesives (Starch corrugation glue)

M/s Maitreya Enterprises

C-21, MIDC, Wadi, Tah. Hingna

Nagpur-440023

Demand Study

• The market for Corrugated fibre board boxes is both local and global. Though we are focussing on mainly regional perspectives. Nagpur is a big market having number of large industrial consumers like Mahindra logistics, Haldiram’s, Indo-Rama synthetics and a large number of retailers.

• In view of other regional competitors the Annual production capacity is set as 240 MTs of corrugated boxes

Location Study

Availability of Land2800 Sq.Feet industrial shop available on rent with basic amenities

TransportationRented vehicles for transportation and supply are easily available

Approach to site Good network of Rail and Road transport.

WaterPersonal Bore water of land Owner is available for drinking water and daily needs. Municipal Corporation supply is also available

Power Electricity is available with 24*7 from MSEB

Proximity of supplier Raw material suppliers are located in the town.

Proximity of marketMany Customers have their plants in the MIDC Industrial zone.

Implementation Schedule

SR. No.

Activity Estimated Period

1 Preparation of Project Report

2 Registration under MSME Act 0 – 1 Month

3 Preparation of Scheme 0 –1 Month

4 Sanction of Loan 1 – 5 Month

5 Placement of Order for Plant & Machinery

5 – 6 Month

6 Power & Water Connection 5 – 6 Month

7 Erection of Machinery 6 – 7 Month

8 Procurement of Raw material & Trial Run

7 – 8 Month

9 Commercial Production 8th Month onwards

Economics of the Project

• Basis and presumptions1. Finished Product(s) : Corrugated Fibre Board Boxes

2. No. of working days/year : 300

3. No. of shifts/day : 1 No. of working hours/shift : 8

4. Annual Installed Capacity : 240 tons of corrugated boxes

• Financial Aspects1. LAND AND BUILDING

Rented building at M.I.D.C.Hingna

Description Area (Sq.ft) Amount (Rs)Work 1500Store & Office 1300Total Area 2800 8,000/- per

month

2. MACHINERY AND EQUIPMENTSUnit Description Qty Amount (Rs)

Corrugating unit Single Face Corrugating M/c, 52” 1 5,65,000

Box making unit

Board Cutter, 62” x 62” 1 90,000

Sheet Pasting Machine 1 1,10,000

Sheet Pressing M/c 1 1,40,000

Box Stitching M/c 1 60,000

Testing Equipment

Bursting Strength Factor Tester 1 30,000

Grammage Tester 1 5,000

Compression Strength Tester 1 150,000

Puncture Resistance Strength M/c 1 30,000

Subtotal 11,80,000

Cost of installation, erection, commissioning Taxes, Freight Insurance etc. 10% 1,18,000

Total 12,98,000


3. MISCELLANEOUS EQUIPMENTS

Sr. No. Description Amount (Rs)

1 Electrification Expenses and Electrical Equipments 30,000

2 Weighing Machine 15,000

3 Maintenance Tools & Equipment 5,000

4 Office Furniture & Equipment 40,000

5 Fire Fighting & Other Safety Equipments 25,000

Total 1,15,000


4. COST OF RAW MATERIALS, CONSUMABLES & PACKAGING MATERIALS PER MONTH

Sr. No. Description Qty. Unit Amount (Rs)

1 Kraft Paper@ Rs. 20/kg

20 MT. 4,00,000/-

2 Stitching Wire 130 Kg 6,500/-

3Adhesive @ Rs. 30/kg

1.5 MT. 45,000/-

4Misc. Consumable Stores 5,000/-

Total 4,56,500/-


5. STAFF & LABOUR REQUIREMENTS & MONTHLY SALARY/WAGES

Sr. No. Description Nos. Amount (Rs)

1 Manager Self

2 Supervisor 1 10,000/-

3 Accountant 1 5000/-

4 Skilled Workers 3 12,000/-

5 Unskilled Workers 2 5,000/-

6 Watchman 1 4,000/-

Total 36,000/-

(+) Perquisites @ 15% of salaries 5,400/-

Total 41,400/-


6. COST OF UTILITIES PER MONTH

Sr. No. Description Qty. Amount (Rs)

1 Rent --- 8,000/-

2 Power @ Rs 8.4per unit 10 HP 10,000/-

3 Water and fuel --- 3,000/-

Total 21,000/-


7. OTHER MISC. EXPENSES PER MONTH


1 Telephone Expenses 1,000/-

2 Postage & Stationery 1,000/-

3 Marketing & Traveling Expenses 5000/-

Total 7,000/-


FIXED COST WORKING CAPITAL PER MONTH

Sr. No.

Description Amount (Rs)

1Raw materials, consumables 4,56,500/-

2 Monthly salary/wages 41,400/-

3 Cost of utilities 21,000/-

4 Other misc. Expenses 7,000/-

Total 5,25,900/-


Sr. No.

Description Amount (Rs)

1Machinery and equipments 12,98,000/-

2Miscellaneous equipments 1,15,000/-

Total 14,13,000/-

TOTAL CAPITAL INVESTMENT



1 Fixed Cost 14,13,000/-

2 Working capital for 2 months 10,51,800/-

Total24,64,800/-

Say 25,00,000/-

Means of Financing of the Project

It is proposed to finance the project as follows

• Term Loan from State Bank of India : 20,00,000 /-

Rate of Interest 12.5% for 10 years

• Promoters’ Contribution : 05,00,000/-

Total 25,00,000/-


Cost of production per annum

Financial Analysis

Sr. No. Description Amount ( Rs.)

1. Raw Materials & consumables 54,78,000/-

2. Salary & Wages 4,96,800/-

3. Utilities 2,52,000/-

4. Other Misc. Expenses 84,000 /-

5. Annual Instalment paid 3,51,000/-

6. Depreciation on Machinery & Equipment @ 10 % p.a.

1,00,000 /-

Total 67,61,800/-

Financial Analysis

TURNOVER PER ANNUM

By sale of 220MT (Annual production with 8% scrap) of corrugated box @ Rs.34,500/ton

= Rs. 75,90,000/-

PROFIT PER ANNUM

= Turnover – Cost of production= 75,90,000 – 67,61,800

= Rs. 8,28,200/-

Financial Analysis

PROFIT RATIO ON SALES

= ( Annual Profit / Sales Turnover ) * 100

= ( Rs. 8,28,200 / Rs. 75,90,000 ) * 100

= 10.91 %

RATE OF RETURN ON INVESTMENT

= ( Annual Profit / Total Capital Investment ) * 100

= ( Rs. 8,28,200 / Rs. 24,65,000 ) * 100

= 33.6 %

Financial Analysis BREAK EVEN POINT

• Selling price = Rs. 34,500/Ton

• Variable Cost = (Annual Cost Of Production/ Annual production)

= 67,61,800/ 220

= Rs. 30,735/Ton

• Total Fixed Cost = Rs. 14,13,000

• Unit Contribution = Selling price - Variable Cost

= 34,500 – 30,735

= Rs. 3765/-

• Break Even Sales = Total Fixed Cost/ Unit Contribution

= 375 Ton of corrugated boxes

MACHINERY & EQUIPMENT SUPPLIERS

• M/s Mohan Industrial Machine Tools2, Parthasarathy Nagar 10th StreetAdambakkam, Chennai -600088.Conatct person: Mr. M. Saravanan Mob. +91 944020352email: [email protected]

• Senior Paper-packaging Machinery Mfg. Co.Manawala Khurd, G.T. Road, Amritsar, Punjab. .Conatct person: Mr. Kawaljit Singh Mob. +91 9316099121email: [email protected]

mailto:[email protected]

mailto:[email protected]

Thank You

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Corrugated box pratik pourkar