Project Report

On

Papers cup Product

I N D E X

S.No	Description
1.	Introduction
2.	Market potential
3.	Manufacturing process
4.	Flow sheet diagram
5.	About the promoter
6.	Basis and Presumption
7.	Inspection and quality control
8.	Production Capacity
9.	Pollution control
10.	Electrical requirements
11.	Financial aspects
12.	Total Recurring expenditure
13.	Working capital assessments
14.	Other financial aspects
15.	Break-even analysis
16.	Profitability Statement
17.	Break Even Analysis:
18.	Repayment Schedule
19.	Profitability Statement
20.	Risk Factors

MANUFACTURE OF PAPER PRODUCTS (PAPER CUP)

1. INTRODUCTION:

Disposable food service products, like paper cups, were first created to make sure the food we eat stays safe and healthy when we buy it from restaurants or cafes. At the start of the 1900s, people were starting to worry about harming our environment, so they needed ways to protect it. This is when paper cups became a great idea.

Paper cups have some important benefits compared to cups made from other materials. People all over the world are now liking paper cups because they look nice and are a smart way to avoid getting sick from food.

In simple words, paper cups were made to keep our food safe and help our planet, and now they're becoming popular because they're both useful and good-looking.

Paper cups have many benefits. They are made easily with safe materials, produce minimal waste, and are simple to recycle. They're great for serving drinks and food at parties, picnics, weddings, and food places like tea shops. These cups are safe to use because they don't contain harmful substances. They come in various attractive designs and can even be customized with a logo or message.

These disposable paper cups come in different styles, colors, and sizes, making them look beautiful and stylish. They add a fancy touch to any event.

So, making paper cups is a promising idea for the future. It helps promote the use of eco-friendly products, which is good for our environment.

2. MARKET POTENTIAL

In a world where businesses operate worldwide, the success of a paper product, like paper cups, depends on how much people around the world want them. For paper cups, there aren't enough factories worldwide to make as many as people want. This shortage happened because, in the past, there was a big demand for eco-friendly products, so factories were built to make more cups.

The future of the paper cup business in India looks bright. Many different types of paper cups are made and sold there. Paper cups are seen as a business with a lot of potential in India.

Basically, the success of paper cups in India and around the world depends on how much people want them and how many can be made.

In India, they make and sell lots of different paper cups. These cups are seen as a great business opportunity. The reason for making paper cups is to meet the needs and desires of people who want to use them.

To do this, they come up with a plan to make paper cups that are good for food and not too expensive for the people who want to buy them.

The success of paper cups depends on how many people want to use them. In our country, many people use paper cups because they are easy to use, clean, and good for the environment. So, the demand for paper cups is going up, and the company that makes them is doing a good job in the market.

3. MANUFACTURING PROCESS OF PAPER CUPS:

We have proposed to use the Automatic Paper Cup Forming Machine for our manufacturing process of Paper Cups.

1. Paper Roll Selection: The process begins with selecting the right kind of paper roll. This paper is usually food-grade and coated to make it waterproof.

2. Printing: If the cups are going to have any designs, logos, or patterns, this is the stage where they are printed onto the paper.

3. Die Cutting: The printed paper is then cut into a round shape, which will form the bottom of the cup. This is usually done with a die-cutting machine.

4. Cup Forming: The round cutouts are then sent to a cup forming machine. Here, the cutout is wrapped into a cylindrical shape, creating the body of the cup.

5. Bottom Attachment: The circular bottom cutout is attached to the cylindrical body of the cup, creating a complete cup shape.

6. Side Sealing: The side seam of the cup is sealed to ensure it doesn't come apart. This is usually done with a heated roller or adhesive.

7. Quality Control and Packaging: The cups go through a quality check to ensure they meet the required standards. After passing inspection, they are packaged and made ready for shipment.

4.FLOW SHEET DIAGRAM

5.About the Promoter

v Name: Nikhil Mohabiya

v DOB: 01/12/2002

n v Phone. No: -6415263987

v Gender: Male

v Permanent Address: Ekta Colony Ward No 32 Chandan

nagar chhindwara(M.P)

v Nationality: Indian

v Languages Known: Hindi,English

v Educational Qualification:

Qualification	Year	Institute	Score
Class XII	2020	Gyan Ganga Public School (CBSE) Chhindwara(M.P)	86%
Class X	2018	Gyan Ganga Public School (CBSE) Chhindwara(M.P)	82%

6.BASIS AND PRESUMPTION OF THE PROJECT :

1.The process of manufacture is on the basis of double shift of eight + eight hours per day with three hundred working days in a year.

2.Labor and wages mentioned in profile are as per prevailing local rates.

3.Interest rate at 12.5% considered in the project

4.The Promoter contribution will be 10% of the total project cost. However it may be vary for women entrepreneurs.

5.Subsidy and other concessions may be applicable as per the MSME Act of Tamilnadu 2006.

6.The capacity of the plant 40,000 nos. of paper cups per day on the double shift basis.

7.INSPECTION AND QUALITY CONTROL :

“Model Paper Cups” will strictly adhere to the International FDA standards and Indian BIS standards in the process of manufacturing Paper Cups from procuring high quality food grade raw materials to hygienic methods of packaging, as we know that the satisfaction of the customers is the foundation of any business.

8.PRODUCTION CAPACITY PER ANNUM :

Quantity: 40,000 nos. of paper cups per day 1,20,00,000 nos. of paper cups per annum (300 days)

9.POLLUTION CONTROL

The technology adopted for making paper cups is eco-friendly. Cup forming process is totally automatically done by the machine, only feeding and packaging involves manual work. The scrap papers created out of this manufacturing process also can be sold for recycled paper converters. Hence there is no chance of any pollution out of this industry.

10.Electrical HP Details:

S.No

Name of the Machine

No: of m/s

H.P

Connected

Automatic Paper Cup Forming Machines

Other electrical fittings/ lighting etc

Total H.P Connected

11.FINANCIAL ASPECTS

12.RECURRING EXPENDITURE (PER MONTH ):

(A) Raw Material Per Month:

S.No	DESCRIPTION	QUANTITY	RATE	AMOUNT Rs
1	Printed Blank – Side Wall	2,500 kgs.	75.00	1,87,500
2	Bottom Reel Paper	800 kgs	72.00	57,600
3	PP cover & Carton Boxes	As required	--	10,000
Total (A)				2,55,100

(b) Salaries & Wages Per Month :

S.No	DESIGNATION		NO	SALARY	AMOUNT Rs
1	Production cum Marketing Manager (Proprietor)		1	7,500	7,500
2	Machine Operators		2	5,000	10,000
3	Checking & Packaging Women		2	3,000	6,000
4	Office Assistant		1	3,000	3,000
Total					26,500
		Perquisites 15 %			3,975
Total (B)					30,475

C) Utilities Per Month :

S.No	DESCRIPTION	AMOUNT Rs
1	Power 5 HP 750 Units @ Rs. 5 per Unit	3,750
2	Machine Oil, grease & other consumables	1,000
Total(B)		30,475

(D) Other Expenses Per Month :

S.No	DESCRIPTION	AMOUNT Rs
1.	Rent	5,000
2.	Marketing expenses & Advertisement	3,000
3.	Postage and stationery	250
4.	Repairs and maintenance	500
5.	Traveling and transportation	1,000
6.	Insurance	250
7.	Telephone & Mobile	2,000
8.	Packing Materials	500
Total(D)		12,500

TOTAL RECURRING EXPENDITURE PER MONTH:

a + b + c + d = Rs. 3,02,825/-

Recurring Expenditure for three months = Rs. 9,08,475/-

13.WORKING CAPITAL ASSESSMENT:

S.No	DESCRIPTION	AMOUNT Rs
1.	Raw Material (Required for one month)	2,55,100
2.	Work in progress (Required for one month)	43,750
3.	Finished Good (Required for 15 days)	1,50, 000
4.	Bill receivable (Required for 15 days )	2,00,000
Total Say		6,48,850 6,50,000

14. FINANCIAL ASPECTS
14. a. Total Project Cost a. Plant & Machinery		Rs 8,75,000
b. Working capital		6,50,000
	Total	15,25,000
14.b Means of Finance Total Project cost		Rs 15,25,000
Promoter contribution 10%		1,52,500
	Total	13,72,500

Finance required from the Bank 13,72,500/-

14.c. Cost of Production Per Annum :

S.No	DESCRIPTION	AMOUNT (Rs)
1	Total recurring cost	36,33,900
2	Interest on Bank Loan @12.5%	1,71,563
3	Total Depreciation on Machinery @15%	1,31,250
4	Total Depreciation on furnitures and other equipments @ 20%	5,000
TOTAL		39,41,713

15.Turnover Per Annum :

By sale of 1,20,00,000 nos. of Paper Cups of sizes at market value : 110 ml @ 0.36 & 170 ml @ 0.42 and

on an average @ Rs. 0.39 x 1,20,00,000 cups

Total Turnover Per Annum : Rs. 46,80,000/-

16.Profit Per Annum :

Turnover - Cost of Production 46,80,000 -39,41,713

= 7,38,287/-

1. % of profit on sales = Profit/annum X 100

Turnover

= 738287 X 100/46,80,000

= 15.77%

2. Rate of Return = Profit/annum * 100

Total Capital investment

= 738287 X 100

1525000

= 48.41%

17.Break Even Analysis:

(1) Fixed expenditure per annum: Rs.

Interest on Loan	1,71,563
Total Depreciation	1,31,750
40% of salary and wages	1,46,280
40% of other expenses & Utilities	82,800

= 5,32,393

(2) Profit per annum = Rs. = 7,38,287/-

Break Even Point = Fixed Cost/annum * 100 /fixed cost/annum + Profit/annum

= 532393 X 100/1270 = 41.89%

18. Repayment Schedule

Repayment of total loan Rs. 13.72 lakhs will be repayable in 6 years with 66 installments with 6 months holiday period. The rate of interest has been calculated @ 12.5% per annum however the rate of interest will be varying while implementing the project.

(Rs.in lakhs)

Year	Months	Principle	Installment	Interest	Total Interest	Total Repayment
1	6	13.72	--	0.85	1.70	2.94
1	6	13.72	1.24	0.85	1.70	2.94
2	6	12.48	1.24	0.78	1.48	3.96
2	6	11.24	1.24	0.70	1.48	3.96
3	6	10.00	1.24	0.62	1.16	3.64
3	6	8.76	1.24	0.54	1.16	3.64
4	6	7.52	1.24	0.47	0.86	3.34
4	6	6.28	1.24	0.39	0.86	3.34
5	6	5.04	1.24	0.31	0.54	3.02
5	6	3.80	1.24	0.23	0.54	3.02
6	6	2.56	1.24	0.16	0.42	2.98
6	6	1.32	1.32	0.08	0.42	2.98

19.Profitability Statement

S.No	Year	1	2	3	4	5	6
S.No	Capacity Utilization	65%	70%	75%	80%	85%	90%
1.	Turnover	46.80	49.14	51.59	54.17	56.88	59.72
2.	Raw materials	30.61	32.14	33.74	35.43	37.20	39.06
3.	Manpower	3.65	3.83	4.02	4.22	4.43	4.65
4.	Utilities	0.57	0.59	0.62	0.65	0.69	0.72
5.	Other expenses	1.50	1.57	1.65	1.73	1.82	1.91
7.	Total Interest	1.70	1.48	1.16	0.86	0.54	0.51
8.	Repayment of loan	1.24	2.48	2.48	2.48	2.48	2.56
10.	Profit before tax	6.59	6.22	7.19	8.16	9.15	9.80
11.	Provision for tax	1.50	2.00	2.50	3.00	3.50	4.00
12.	Profit after tax	5.09	4.22	4.69	5.16	5.65	5.80

(Rs.in lakhs)

20.Risk Factors

Following are the risk factors that will come when we start paper cups product manufacturing: -

1. Market Competition: The paper cups market might already be saturated, with established competitors. Entering such a market can make it challenging to gain a foothold and attract customers.

2. Environmental Concerns: Consumers are becoming increasingly environmentally conscious. If your paper cups are not eco-friendly or if your business doesn't have a clear sustainability strategy, it could impact your reputation and sales.

3. Regulations and Compliance: The manufacturing and distribution of paper cups could be subject to various regulations, including health and safety standards, waste disposal regulations, and more. Non-compliance can result in fines and legal issues.

4. Supply Chain Issues: Dependence on suppliers for raw materials can lead to disruptions if there are shortages, quality issues, or logistical problems.

5. Fluctuating Costs: The cost of raw materials, manufacturing, and transportation can vary. Changes in these costs can affect your profit margins.

6. Changing Consumer Preferences: Consumer preferences can shift rapidly. If people move away from disposable products or if your target market's preferences change, your business could be impacted.

7. Economic Factors: Economic downturns can lead to reduced consumer spending, affecting demand for disposable products like paper cups.

8. Technological Changes: Advancements in technology could lead to alternative solutions or more efficient manufacturing methods, affecting the demand for traditional paper cups.

9. Brand Establishment: Building a recognizable and trustworthy brand takes time and effort. Negative customer experiences or poor-quality products could harm your brand's reputation.

10. Financial Investment: Starting a business requires significant upfront investment for manufacturing equipment, raw materials, marketing, and more. It may take time to recoup these costs.

To mitigate these risks, thorough market research, a well-defined business plan, a focus on sustainability, quality control measures, and a clear understanding of the regulatory landscape are essential.

It's important to be adaptable and responsive to changing market dynamics and consumer preferences.

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Project Report On Papers cup Product