Narail Papers Mills Ltd. (

7/30/2019 Narail Papers Mills Ltd. (

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Chapter-I

Company Overview

INTRODUCTION

Narail Papers Mills Ltd. (Proposed) will be a Paper manufacturing unit to be set up in Narail.

In our country, export volume in RMG sector covers about 70% of total volume of countrys

export. RMG products are stored in paper made cartoon and these papers are mainly imported

from other country. Making these papers) is not tough job in our country as we have sufficient

raw materials and well known technical hands. Further, setting of this paper industry will save

huge foreign currency as well as lead time for our RMG industry. This factors promote all the

sponsors to start such venture.

PROMOTERS

The project is being promoted as a private limited company by a group of 2(two) persons. The

particulars of the promoting directors with their position and extent of share holding in the

company are as under :

Sl.

No.

Name of the Promoters Present Address Permanent

Address

Status Share-

holding

1. M.G.K. Jewel 16, Mahanagar Project,Rampura,Dhaka

Vill+Thana+Post:Lohagara,District:Narail

Chairman 50%

2. Asif-U-Daula Vill+Thana+Post:Lohagara,District:Narail

Vill+Thana+Post:Lohagara,District:Narail

ManagingDirector

50%

CREDIT WORTHINESS OF THE DIRECTORS :

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(Taka in 000)

Sl.No Name of the Director Immovable

properties

Investment Total

1. M.G.K. Jewel 33450 23657 57107

2. Asif-U-Daula 7000 12682 19682

Total : 40450 36339 76789

CORPORATE SET-UP

The sponsors will form a private limited company. The company will be got registered with

the office of the Registrar of Joint Stock Companies, Dhaka. The overall management will be

vested with the Managing Director of the company who will be assisted by the other

sponsoring directors. The Board of Directors will decide and formulate policies and will

provide guidelines for smooth operation of day-to-day business. Besides, skilled local

personnel will be recruited for smooth operation of the project.

Chapter -II

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Product

The annual production capacity of the project on the based on 360 working days in a year is

given below :-

Table-I

Sl. No. Items of production Unit Quantity

1. High quality Paper Ton 15000

The above production schedule /quantity may be changed as per market demand.

Chapter III

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Marketing Aspect

Paper is the carrier of knowledge. It is part & parcel of Modern civilization. Now a days, we

cannot think without paper for its diversification of use.

Presently in Bangladesh the garment sector holds a very important position in our industrial

arena in respect of its contribution to employment, value addition and foreign exchange

earning. At present, garment is the highest export-earning sector in the country. The garments

& sweeter are exported in the corrugated cartoon box, which is made of Kraft and Liner

paper. These papers are mostly imported from Korea & India.

DEMAND ESTIMATION OF THE KRAFT, LINER PAPER & OTHER PAPER

In 000 MT

Table-II

Category of

paper

1991 1996 2001 2004 2008 2012

Kraft & Liner

paper

28 36 55 90 110 135

Other Paper 24 39 64 105 125 150

Total 52 75 119 195 235 285

SUPPLY GAP OF PAPER

From the Table - II & estimated supply of paper in the country we can calculate the difference

between demand and supply i.e. supply gap in the below Table - III.

Table-III

In 000 MT

Year Estimated demand Potential supply Gap

2001 2002 234 120 1142002 2003 280 120 160

2003 2004 336 120 216

2004 2005 403 120 283

2005 2006 483 120 363

2006 2007 580 120 460

2007 2008 696 120 576

2008 2009 835 120 715

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2009 2010 1000 120 880

2010-2011 1200 120 1080

2011-2012 1350 120 1230

MARKET SHARE

The annual rated capacity of the proposed unit is 15,000 MT. The project is expected to go into

commercial operation in 2013 and it would be able to satisfy about 1.11% of the existing supply

gap as shown in Table-IV

TABLE-IV

MARKET SHARE

(in 000MT.)

Y e a r Supply gap Proposed capacity Market share(%)

2011-2012 1350 15 1.11

OUTPUT PRICE

The project will produce Kraft paper. The present CFR price of the of kraft paper varies from

US$ 400.00 to US$ 450.00 per MT. However proposed selling price of the product considered at

US$ 375.00 eqvt. Tk 26,250

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Chapter IV

Management plan

The technology involved in manufacturing kraft & liner paper is already available in the

country. A good number of units are in operation since long. Training facilities are also

available from the Government as well as from the private sector and hence, trained personnel

are also available locally. Besides, the required machinery and equipment will be installed and

commissioned under the supervision of the machinery supplier. Necessary technical personnel

are also be trained by the experts of supplier of machinery. As such, it is expected that the

project will not face any dearth of technical staff for maintaining the Farm.

MANPOWER

The total manpower requirement for the project during commercial operation has been

estimated and category wise personnel have been shown below, which will be recruited

locally:-

Sl.No. Name of the post Nos.

A. Technical:Production Manager (Mill Incharge) 1Asstt. Production Manager 1Mechanical Engineer (maintenance) 1Electrical Engineer (maintenance) 1

Machine Operator 10Generator Operator 3Skilled Labor 45Semi skilled Labor 60Peon/ Guard/ Sweeper 9

Total : 131

B. Administrative:General Manager 1Commercial Manager 2Sr. Executive 2Commercial Officer 1Store Officer 2Accountant/Computer Operator 4Driver 3Peon/ Guard 9

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Sl.No. Name of the post Nos.

Total : 24

Grand Total ( A+B) : 155

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Chapter-5

Operating Plan

BRIEF DESCRIPTION OF THE PROJECT

Purpose and Design

The proposal envisages setting up of a 100% export oriented modern & sophisticated paper

mill for manufacturing Kraft & liner paper in the name and style ofNarail Papers Mills Ltd.

(Proposed). In Bangladesh the demand for the proposed products are gradually increasing

day by day by the increase of the export oriented garment industries in the country. This has

encouraged the promoters to set up this project in the country. The imported machinery will

be of Chinese, USA origin. Besides the imported machinery the project will require some

local machinery. After implementation of the project it will create job opportunity for 161

persons in different category and grade. The fixed cost of the project has been estimated at Tk.

3455.53lac.

Manufacturing Process

The technology involved in manufacturing of Kraft & Liner Paper is very simple and

available in the country. First the waste paper & chemical mixed in required proportion in the

pulp section. In this section some pulp will mixed with waste paper for making whiteness of

the product. Production of Kraft & liner paper depends upon the mixing of waste paper,

chemical & pulp. After mixing the mixture passes through the Three Roll Calendar & Paper

Rolling machine . After rolling the paper winded in the Rewinder. During the process the

paper dried by steam.

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The process flow diagram is reflected as below:-

FLOW DIAGRAM

Mixing of waste paper, chemical & pulp

Passing through Three Roll Calendar

Passing through Paper Rolling Machine

Heating

Rewinding

Packing

Marketing

Building and other civil Works

The civil works for the project includes Main Factory Building includes Pulping Section,

paper making section, finishing section, cutting & packaging section etc. with overhead craneinstallation. Besides main factory building the civil works includes raw material godown,

finished goods godown, generator & sub station room, engineering workshop, 2 storied office

cum officers quarter etc. The civil works will be made of pre-engineered structure & RCC

structure, brick masonry walls, mosaic floor, doors, windows etc. The total cost of civil works

including electrification & sanitation has been estimated at Tk.531.96 lac.

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Machinery and equipment:

Imported

The imported machinery and equipment of the project are consists of Pressure mould

paper mould machine, Three roll Calendar, Paper rolling machine, Rewinder, Pulping

section Boiler, Gas generator etc. The Main machinery has been proposed to be

imported from China, USA. The total cost of the imported machinery is estimated at

Tk. 2217.05 lac.

Local

The project will also require some local machinery / equipment which will include

Deep tubewell, Electrical sub station equipment, different gas & steam pipelines etc.

The total cost of the local machinery is estimated at Tk.210.00 lac

Installation

The supplier of machinery will conduct the installation of machinery. The Erection,

installation, test operation and commissioning of main machinery & equipment will be carried

out by local erectors under the overall supervision of foreign experts to be deputed by the

supplier of machinery. An amount of Taka 45.00 lac has been estimated for this purpose.

Utilities

(i) Water:

The daily requirement of water has been estimated at 1,000 litre per day, which will be made

available from projects own Deep tube well to be sunk at the project site. The cost of

installation of Deep tube well with pump and motor has been estimated at Tk. 25.00 lac, the

cost of which included in the local machinery.

(ii) Power:

The project will use own generated electricity. The maxm. demand would be around 1500

kw.The power will be available from the projects own generator.

Apart from the gas generator the project will procure a 2 nos.750 KVA electrical sub station

equipment for un-interrupted operation. The cost of Electrical Sub-Station set included in the

list of local machinery

(iii) Fuel & Lubricant :

The project will require the following items annually:

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Item Quantity

Lubricating oil 200 kgGrease 2000 litreDiesel 15000 litreKerosene oil 3000 litre

Gas 200000 cu.ft

Transportation

For the project 1(one) Pick-up Van with 3 ton capacity for carrying finished goods & 1 (one)

car to be used by the Officers.. The Cost of the pick-up Van & car has been estimated at Tk.

25.00 lac.

Raw materials

The raw materials for the project are the waste paper & chemical in which chemical will be

imported & waste paper will be procured locally. The requirement of raw material has been

given below:

Sl.No. I t e m Unit Quantity

A. Imported:

1. Chemical Ton 15

B. Local

3. Waste paper Ton 16667

4. Packing material L.S Tk.10.00 lac

Stores & Spares:

The annual requirement of stores and spares for the machinery and equipment has been

estimated at 0.5%, 1%, 1.5% and 2% of its cost for the 1 st, 2nd, 3rd and 4th years of operation

respectively.

Repair and Maintenance:

The annual requirement of repair and maintenance for the machinery has been estimated at .

05%, 1%, 1.5% and 2% of its cost for the 1st

, 2nd

, 3rd

and 4th

year of operation respectively.The repair and maintenance cost of building has been estimate @0.5% of its cost for every

year.

Safety Provision:

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Necessary arrangement will be made to fight against fair hazard by procuring fire fighting

equipment for which an amount of Tk. 200,000.00 has been earmarked.

Office fixture and furniture:

An amount of Tk. 3.50 lac has been estimated for procurement of office equipment, furnitureto be required for the project.

Schedule of Construction:

The project will start commercial operation within 9 (nine) months from the date of opening

of L/C. for machinery.

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Chapter-vi

Financial Evalution

Cost of the project

The total cost of the project has been estimated at Tk 3514.04 lac including a net working

capital of Taka 58.52 lac. The summarized project cost is presented below:

(Taka in 000)

Items To be incurred

Land : 8381

Building : 51396Plant & Machinery : 230573Local Machinery : 21000Erection & Installation : 11000Furniture, Fixture & Equipment : 350Vehicle : 2500Safety equipment : 200Consultant's Fee 500Pre-operating Expenses 3717Interest During Construction : 15936

Total Fixed Cost : 345553

Working capital (net) : 5852Total capital outlay : 351404

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Means of finance

The aforesaid cost is proposed to be financed as under :

(Taka in 000)

Items To be incurred

Banks loan (Proposed) : 228413Total loan : 228413

Equity

Sponsors investment 122992Total Equity : 122992

Total Loan & Equity : 351404

Profitability

(Taka in 000)

Year 1 Year 2 Year 3 Year 4Sales Revenue 226091 254730 274736 275594

Cost of Goods Sold 150269 167667 182933 186355

Gross Profit 75822 87063 91803 89239

Gen.Admin & other expenses 5150 5423 5695 5943

Operating Profit 70672 81640 86108 83296

Financial expenses 23820 22893 20885 18593

Net Operating Profit Before tax 46852 58747 65223 64703

Income Tax Tax Holiday

Investment 20% 9370 11749 13045 12941

Net Profit after Investment 37482 46998 52178 51762

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Capital structure

The authorized capital & paid-up capital of the company will be Tk. 3600.00 lac and Tk.

1229.92 lac respectively.

Financial evaluation :

Profitability potential of the project has been estimated for four years of operation to

assess the financial viability of the project. The financial projections include

estimation of sales, operating cost, administrative and selling expenses and financial

overheads. The main assumptions of earning forecast are as follows:

(i) The factory will work on the basis of three shifts (8 hours each)

operation per day and 300 working days in a year;

ii) The cost of raw materials and the sales has been calculated on the basis

of prevailing market prices;

iii) The cost of raw materials as well as the selling price of the finished

goods have been assumed to be kept constant throughout the projected

years on the assumptions that any increase in the price of raw materials

will be off-set by the consequential increase in selling prices;

iv) In calculation of working capital requirement, stock of raw material has

been considered for 30 (thirty days).

v) An increment @ 5% per annum has been considered in the calculation

of wages and salaries and the amount of bonus is considered to be equal

to two months pay;

vi) Depreciation bas been charged on straight line method on the following

rates:

Building 5%

Machinery 10%

Other assets 20%

vii) Capacity utilization has been assumed at 60%, 65%, 70%, 70% in 1st,

2nd, 3rd, and 4th years of operation respectively;

viii) Economic life of the project has been assumed to be 10 years without

any major replacement.

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Chapter-vi

Ecological Aspect

The production and use ofpaperhas a number of adverse effects on the environment which

are known collectively as paper pollution. Pulp mills contribute to deforestation, air, water

and landpollution. Discarded paper is a major component of many landfill sites. Paper

recycling can be a source of pollution due to the sludge produced during deinking.

Worldwide, the pulp and paper industry is the fifth largest consumer of energy, accounting for

four percent of all the world's energy use. The pulp and paper industry uses more water to

produce a ton of product than any other industry.

However, The social benifit of project is more than that of environmental cost.

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http://en.wikipedia.org/wiki/Paperhttp://en.wikipedia.org/wiki/Environment_(biophysical)http://en.wikipedia.org/wiki/Pulp_millhttp://en.wikipedia.org/wiki/Pulp_millhttp://en.wikipedia.org/wiki/Air_pollutionhttp://en.wikipedia.org/wiki/Water_pollutionhttp://en.wikipedia.org/wiki/Solid_wastehttp://en.wikipedia.org/wiki/Solid_wastehttp://en.wikipedia.org/wiki/Solid_wastehttp://en.wikipedia.org/wiki/Landfillhttp://en.wikipedia.org/wiki/Paper_recyclinghttp://en.wikipedia.org/wiki/Environment_(biophysical)http://en.wikipedia.org/wiki/Pulp_millhttp://en.wikipedia.org/wiki/Air_pollutionhttp://en.wikipedia.org/wiki/Water_pollutionhttp://en.wikipedia.org/wiki/Solid_wastehttp://en.wikipedia.org/wiki/Landfillhttp://en.wikipedia.org/wiki/Paper_recyclinghttp://en.wikipedia.org/wiki/Paper_recyclinghttp://en.wikipedia.org/wiki/Paper

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Narail Papers Mills Ltd. (