PLASTIC BOTTLES CAPS INTRODUCTION Bottle caps can be manufactured both form thermosetting material (UF & PF) as well as thermoplastic material (PP, HIPS, HDPE etc.) the present scheme envisages setting up of a unit comprising of a compression moulding and injection moulding sections. However, many a time more than one conversion techniques may be employed in the same unit in order to cover a wider range of products. MARKET The plastic caps are widely used in capping the bottles where liquids are packed. The plastic market has been increasing phenomenally as can be seen for the following figures. The Indian Plastic Industry has taken great strides in its quest for success. The last few decades have seen it rise to the position of a leading force in the country with a sizable base. The industry itself is growing at a fast pace and the per capita consumption of plastics in the country has increased manifold as compared to the earlier decade. Plastic has undoubtedly gained notable importance in every sphere of activities. It has helped substitute and save scarce natural resources. It is an inseparable part of our daily life. Constant development in polymer technology, processing machinery, know how and cost effective production is fast replacing plastics in every segment from its conventional materials Polymer demand in India to touch 7.3 million tons by 2006-2007 and 12.4 million tons by 2010-2011. India is expected to be the 3rd largest consumer of plastics after US and china by 2010. 1
Growth rate between 12% - 15%. Consistently outperforming GDP. Major Raw Material Producers 15 Processing Units 22,000 Nos Turnover Rs. 25,000 crores Capital Asset Rs. 47,000 crores Raw Material produced approx. 4.2 million tones Raw Material consumed approx. 3.7 million tones Employment Direct / Indirect 2.5 million Export value approx. USD 1104 million Revenue to Government approx. Rs. 6000 crores Demand estimates for major Polymers - INDIA (1000 Tones) 2003 2004 LDPE 281 Linear PE / LLDPE / HDPE 1666 3000 PP 1737 2569 PVC 986 1614 PS 246 402 PET Bottles 45 100 PET Film 55 100 Demand estimates for Engineering Thermoplastics ABS 40 65 Polyamide ( 6 & 66) 20 32 PET / PBT Moulding Material 2 3 Polycarbonate 20 32 Other Thermoplastics 26 40 2
Thermo sets 116 155 Demand estimates for Machinery Injection Moulding 32350 Nos Blow Moulding 5050 Nos Extrusion 16700 Nos * Source : Task Force on Petrochemical / Industry Estimate The per capita plastics consumption, which is currently at 3 kg, is projected to go up to 7.7 kg by the year 2007. While it is true that our consumption is below the world average of 17 kg, per capita figures should be viewed in the context of our large population; sometimes per capita figures are useful only for trend analysis and not in absolute terms. INSTALLED CAPACITY Product Installed No of Capacity Capacity per capacity per working per day annum hour hours 300 days per per day annum Plastic bottles caps 1. U/F P/F Bottle Caps 1000 pieces 8 8000 pieces 24 Lakhs 2. Thermoplastic caps 1000 pieces 8 8000 pieces 24 Lakhs PLANT AND MACHINERY No. Description Qty Price (Nos.) (Rs.) 1. Compression moulding section : 1 1,00,000 3
(i) Table ting machine (ii) Hydraulic thermosetting 1 1,80,000 Moulding press cap. 25 MT. stroke 12" single day light size of table 16 x 13 working pressure 2 tons/sq. inch. complete with arrangements of ejection, electrically operated, with 5 HP motors and other accessories 2. (i) Injection moulding section : Fully automatic vertical plunger type 1 4,35,000 injection moulding machine 100 gms shot capacity with all accessories & micro processor controlled. (15 HP). (ii) Set of moulds of bottle caps both 2,00,000 injection and compression mouldings 3. Small hand tools, greasing equipment etc. 85,000 Total 10,00,000 MANAFACTURING PROCESS For the manufacture of UF/PF bottle caps hydraulic type compression moulding process is employed. The thermosetting material is put in the cavities of a preheated mould and pressed between the two platens of the press. The combined effect of heat and pressure causes cross linking in the material leading to formation of micro-molecules. This causes the compound to fill the cavity of mould and harden. After a certain time the mould is opened and the mouldings are removed. For the manufacture of bottle caps from thermoplastic material the process involves the following steps : 1. Fixing of requisite dies in the die head 2. Feeding of raw materials in the hopper 3. Injecting molten material into the die 4
4. Cooling and opening of the moulds 5. Ejection of moulding piece and 6. Finishing RAW MATERIALS 4800000 Pieces Qty-MTs Rate/MT Value Rs. Lakhs Thermosetting-PF UF moulding pwd 12.60 50000 6.30 Thermostatic-HDPE/PP 12.60 68000 8.57 Matster batches & colour 0 100000 1.00 TOTAL 15.87 Packing materials 4800000 0.02 0.96 LOCATION LAND AND BUILDING Built up area-sq.ft 1000 Rent p.m.-rs per.5 per sq.ft 5000 Advance-10 months.rs 50000 UTILITIES Three phase- KW 36.00 Power charges Rs.lakhs p.a 8.21 For process-litres per day 0 For human consumption-litres/day 200 MANPOWER Monthly wages Total Supervisor 1 8000 8000 5
Skilled 3 5000 15000 Unskilled 3 3000 9000 Accounts Assistant 1 4000 4000 Sales Executive 1 5000 5000 Security 1 2000 2000 sub total 43000 Add benefits 20% 8600 Total per month 51600 TOTAL PER ANNUM-Rs. lakhs 6.19 SCHEDULE OF IMPLEMENTATION If the financing arrangements are finalised the project can be implemented in three months time. COST OF PRODUCTION AND PROFITABILTY Assumptions Installed capacity Quality 1 UF/PF bottle caps 48 lakh pcs per annum and thermoplastic bottle caps Capacity utilisation Year-1-60% Year -2-70% Year-3 onwards- 80% Selling price Rs.1.00 per piece Raw materials As per the details given above Packing materials As per details given above Power Rs. 8.21 lakhs per annum at 100% Wages and salaries Rs.6.19 lakhs with increase 5% every year. Repairs and Maintenance Rs. 0.60 lakh per annum with 10% annual increase Depreciation Written down value method -15 % on machinery Selling general and Rs.20000 per month with 5% annual increase 6
administrative expenses Interest on Term loan Interest on working capital Income tax 11% per annum 11 % per annum 33.66 % on profits LIST OF MACHINERY SUPPLIERS 1. Textair Plastics & Hydraulics, 18-Ambal Nagar Main Road, Ekkattuthangal-600 097. 2. J.B. Industries, 7 / 36 PH-2 TNHB, Muthamil Nagar- 600 118. 3. Klokner Windor India Ltd, 2-J Mound Road, Teynampet-600 018, 4. Polymechplast Machines LTd, Gold Coin House, 775, G.I.D.C Makarpura Vadodara 390 010. 5. D. G.P. Windsor India Ltd, 2 J, Century Plaza, Teynampet, Chennai 600 018. 6. Europack Machines India Pvt Lts, 52, Bindal Industrial Estate, Sakinaka, Andhari East, Mumbai. 7. Ambica Engineering & Wire Products, L 45, GIDC Estate, Odher, Ahmedabad 382415, 8. Hind Hydraulics & Engineers, Faridabad, Plot No. 13, Sector 74, Faridabad -121005. 9. Prasad Groups & Companies, Plot No. 14 16 GIDC Industrial Estate, Phase 1 Valva, Ahmedabad 382445 10. HMT International Ltd, 59 HMT Bhavan, Bellary Road, Bangalore 560 032. LIST OF RAW MATERIAL SUPPLIERS 1. Lucky Plastics, 421-c, Sngr Road Gpathy CBE-641606. 2. Maruthi Plastic, Old 3 Thirupali ST Sowcarpet- 600 079. 3. Reliance Industries, 501 JVL Plaza Anna Salai, Teynampet 600 018. 4. Shri Swastic PlastICS, 57/2, Thirupalli Street 600 079. 5. Abs Plastics Ltd, 51 Gidc Industrial Estate, Nadesari 391340. 6. Polychem Ltd, 74 Jamshedji Tata Road, Mumbai 400 020 7. Sankar Mercantile Agencies, 43 Vysarpadi Industrial Estate, Chennai 600 039. 8. Indian Petrochemical Corporation. 89 Santhome High Road, Chenai 600 028. 9. PP Industries, 91 Stranhas Road, Ooteri,Chennai 600 012. 7
10. Haldie Petrochemicals, 41 UN Road, T.nagar, Chennai 600 017. 11. V.B. Sree GanpathyColourCompany, 63, Devaraja Mudali Street, 2 nd Floor, Chennai 600 003. 12. Prayag Polytech Pvt. LTd. 2468, Prayag House,?Nalwa Street, Pahar Ganj, New Delhi 110 055. FINANCIAL ASPECTS 1. COST OF PROJECT [Rs. lakhs] Land & Building (Advance) 0.50 Plant & Machinery 10.00 Other Misc. assets 0.50 Pre-Operative expenses 2.00 Margin for WC 0.79 13.79 2. MEANS OF FINANCE Capital 6.29 Term Loan 7.50 13.79 Term Loan amount is assumed at 75% value of the Machinery. 3. COST OF PRODUCTION & PROFITABILITY STATEMENT [Rs. lakhs] Years 1 2 3 4 5 Installed Capacity No of pieces 4800000 4800000 4800000 4800000 4800000 Utilisation 60% 70% 80% 80% 80% Production/Sales- 2880000 3360000 3840000 3840000 3840000 Selling Price per Piece 1.00 Sales Value (Rs. lakhs) 28.80 33.60 38.40 38.40 38.40 Raw Materials 9.52 11.11 12.70 12.70 12.70 Packing Materials 0.58 0.67 0.77 0.77 0.77 Power 4.92 5.75 6.57 6.57 6.57 Wages & Salaries 6.19 6.50 6.83 7.17 7.53 Repairs & Maintenance 0.60 0.66 0.73 0.80 0.88 Depreciation 1.50 1.28 1.08 0.92 0.78 Cost of Production 23.31 25.97 28.68 28.93 29.23 Selling, Admin, & General exp 2.40 2.52 2.65 2.78 2.92 Interest on Term Loan 0.83 0.72 0.51 0.31 0.10 Interest on Working Capital 0.24 0.24 0.24 0.24 0.24 Total 26.78 29.45 32.08 32.26 32.49 8
Profit Before Tax 2.02 4.16 6.32 6.14 5.91 Provision for tax 0.68 1.40 2.13 2.07 1.99 Profit After Tax 1.34 2.76 4.19 4.07 3.92 Add: Depreciation 1.50 1.28 1.08 0.92 0.78 Cash Accruals 2.84 4.03 5.27 4.99 4.70 Repayment of Term loan 0.00 1.88 1.88 1.88 1.86 4. WORKING CAPITAL: Months Values % Margin Bank Consumpti Amount Finance ons Raw Materials 0.50 0.40 25% 0.10 0.30 Consumables 2.00 0.10 25% 0.03 0.07 Finished goods 0.50 0.97 25% 0.24 0.73 Debtors 0.50 1.20 10% 0.12 1.08 Expenses 1.00 0.29 100% 0.20 0.00 2.87 0.69 2.18 5. PROFITABILITY RATIOS BASED ON 80% UTILISATION Profit after Tax = 4.19 Sales 38.40 Profit before Interest and Tax = 7.07 Total Investment 15.97 Profit after Tax = 4.19 Promoters Capital 6.29 6. BREAK EVEN LEVEL Fixed Cost (FC): [Rs. lakhs] Wages & Salaries 6.83 Repairs & Maintenance 0.73 Depreciation 1.08 Admin. & General expenses 2.65 Interest on TL 0.51 11.80 Profit Before Tax (P) 6.32 BEL = FC x 100 = 11.80 x 80 FC +P 18.12 100 11% 44% 67% x 100 52% of installed capacity Or Production volume 24.96 lacs pieces or Sales value Rs.24.96 lacs 9