Project Report
For
Paper Cup
M/S KRUTHIKA ENTERPRISES
BESIDE K.H.T. COMPLEX,
MADHUGIRI ROAD, ANTHARASANAHALLI, ARAKERE
POST, TUMAKURU -572106
Propx: Smt B.N. Kruthika
D/o B.A. Narayanaswamy,
Maruthi Nilaya,
Near K.H.T. Complex,
Antharasanahalli, Arakere Post,
Tumakuru Taluk-572106
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About the Promoter
Name : B.N. KRUTHIKA
Father’s Name : B A NARAYANA SWAMY
DOB :
Sex : FEMALE
Permanent Address : B.A. Narayanaswamy,
#86, “Maruthi Nilaya”
Near K.H.T Complex,
Antharasanahalli,
Arakere Post,
Tumakuru-572106
Marital Status : Unmarried
Nationality : Indian
Languages Known : Kannada , English, Tamil, Thelgu
& Hindi
Educational Qualification : [Link]
Work Experience : 5 Years
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MANUFACTURE OF PAPER CUPS
1. INTRODUCTION:
Disposable food service products were initially developed to enhance
public health by improving practices in the food service industry. This
requirement when combined with the environmental threat faced by us at
the turn of the 20th Century and need of strong efforts in order to
conserve the environment gave birth to the concept of PAPER CUPS. There
are several inherent advantages in using Paper Cups as compared to cups
of other materials. These Paper Cups are gaining popularity all across the
globe as a beautiful and stylish way of minimizing exposure to food borne
infections.
Paper Cups have numerous advantages like; they are manufactured
in a very simple process using Food Grade Raw Materials with least waste
and are easiest to recycle. They are ideal for individual servings at all kinds
of parties, functions, picnic occasions, marriages, chat, tea & food joints, etc.
Non‐toxic in nature, the shapes and surface designs on these paper cups
are attractive and present an inviting look. These paper cups can also be
custom printed with an outlet's logo, brand punch line or advertising
message.
Available in a wide variety of designs, textures, colors and sizes,
disposable paper cups are gorgeous, stylish and eloquent. Adding
premium aura wherever used, these cups are made with utmost care to
detail and are a unique addition to any table setting.
Hence, the future of the proposed unit for manufacturing paper cups
is very vibrant and will be a gesture towards supporting the usage of Eco‐
friendly products.
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2. MARKET POTENTIAL
It is necessary to recognize that in a globalize economic environment the
business outlook for any paper product will depend on the global demand
supply balance for that product. For Paper Cups there is production less
capacity at a global level which was built up over the last decade or so in
response to a boom in global growth and increased levels of awareness of eco‐
friendly products. The growth of the manufacturing sector will be largely
influenced by the growth consumption.
A wide range of paper cups are now produced and marketed in India. The
paper cups are reckoned to be a high potential business for India.
Manufacturing Paper Cups is the purpose of satisfying needs and wants of
Consumers is the market place. Developing a strategy for delivering an effective
combination of food grade quality and cost‐effective features for consumers
within the target market is done.
The prospects of paper cups depend on the value of customers who
utilize it. But in our country paper cups are used by all the people as it is easy
to use, hygienic and eco‐friendly. Hence, the per capita consumption has
increased and the demand for it is recognized. While the demand for paper
cups has shown a good growth, the company will be successful in strategizing
its market operations.
As paper cups are a product of daily consumption and necessity, their marketing
will not be a problem as the consumers are aware of the advantages of
using paper cups. The raw materials are indigeneously available and the
manufacturing process is also simple.
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3. MANUFACTURING PROCESS OF PAPER CUPS:
We have proposed to use the Automatic Paper Cup Forming Machine for our
manufacturing process of Paper Cups.
The general structure of paper cup forming machine is composed of three
stages. They are:
1. The first stage: mainly finishes transmission of the paper cup's side‐wall
paper, shaping side‐wall and transferring them to the second stage after
shaped.
2. The second stage: transmission of the cup‐bottom paper, shaping cup‐
bottom, joining the shaped side‐wall and cup‐bottom, automatic
transmission and discharging of the shaped cup, and curling the shaped
cup's edge.
3. The third stage: mainly includes 45 degree angle separating, preheating,
curling bottom, rouletting, curling rim and so on mechanisms, which are
the important parts in finishing paper cup.
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4. FLOW SHEET DIAGRAM
BLANK BOTTOM
CONE FORMING
+ BOTTOM
FIXING
LOADED TO MOULD
BOTTOM KNURLING
+
TOP KURLING
FINISHED CUP DELIVERY
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5. BASIS AND PRESUMPTION OF THE PROJECT:
i. 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.
ii. Labor and wages mentioned in profile are as per
prevailing local rates.
iii. Interest rate at 12.5% considered in the project
iv. The Promoter contribution will be 10% of the total
project cost. However it may be vary for women
entrepreneurs.
v. Subsidy and other concessions may be applicable as per
the Industrial Policy 2020-25
vi. The capacity of the plant 40,000 nos. of paper cups per
day on the double shift basis.
6. INSPECTION AND QUALITY CONTROL:
Proprietor 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.
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7. 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)
8. 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.
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9. FINANCIAL ASPECTS
10.1. FIXED CAPITAL :
Land & Building : Rented
Machinery and Equipment:
[Link] DESCRIPTION Rate (RS)
1 Automatic Paper Cup Forming 1 nos. 7,00,000
Machine
TOTAL 7,00,000
10. RECURRING EXPENDITURE (PER MONTH ):
(A) Raw Material Per Month: Rs.
S.N DESCRIPTION QTY RATE AMOUNT
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 ‐ 4.,925
Total (A) 2,50,025
10
(b) Salaries & Wages Per Month : Rs.
[Link] DESIGNATION NO SALARY Amount
1 Production cum Marketing 1
Self Self
Manager (Proprietor)
2 Machine Operators 1 10,000 10,000
3 Checking & Packaging Women 2 6,500 13,000
4 Office Assistant 1 6,000 6,000
Total 05 29,000
Perquisites 15 % 4,350
Total (B) 33,350
C) Utilities Per Month : Rs.
S.N DESCRIPTION AMOUNT
1 Power 5 HP 500 Units @ Rs. 8.25 per Unit 4,125
2 Machine Oil, grease & other consumables 500
Total (C) 4,625
(D) Other Expenses Per Month : Rs.
S.N DESCRIPTION AMOUNT
1 Rent 6,000
2 Marketing expenses & Advertisement 3,000
3 Repairs and maintenance 1,000
4 Traveling and transportation 1,000
5 Insurance 1,000
Total (D) 12,000
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11. RECURRING EXPENDITURE PER MONTH:
a + b + c + d = Rs. 3,00,000/-
12. FINANCIAL ASPECTS
14. a. Total Project Cost
a. Plant & Machinery 7,00,000
b. Working capital 3,00,000
Total 10,00,000
14.b Means of Finance Rs
By Bank 9,00,000
Promoter contribution 10% 1,00,000
Total 10,00,000
Finance required from the Bank 10,00,000/-
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14.c. Cost of Production Per Annum : Rs.
S.N DESCRIPTION AMOUNT
1 Total recurring cost 36,00,000
2 Interest on Bank Loan @10% 90,000
Total Depreciation on Machinery & Stabilizer
3 70,000
@10%
TOTAL 37,60,000
15. Turnover Per Annum :
By sale of 1,20,00,000 nos. of Paper Cups
of sizes ranging 150 ml & 210 ml :
(average)
@ Rs. 0.39 Rs. 46,80,000/-
16. Profit Per Annum :
Turnover - Cost of Production
46,80,000 - 37,60,000
= 9,20,000/-
17. % of profit on sales = Profit/annum X 100
Turnover
= 9,20,000 X 100
46,80,000
= 19.68%
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Rate of Return = Profit/annum * 100 Total Capital investment
= 9,20,000 X 100
10,00,000
= 92.00 %
18. Break Even Analysis:
(1) Fixed expenditure per annum: Rs
Interest on Loan 90,000
Total Depreciation 70,000
40% of salary and wages 13,340
40% of other expenses & Utilities 6,650
=========
1,79,990
==========
(2) Profit per annum = Rs. = 9,20,000/-
Break Even Point = Fixed Cost/annum * 100
fixed cost/annum + Profit/annum
= 36,00,000-00 X 100
36,00,000-00 + 9,20,000-00
= 79 %
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19. Profitability Statement
(Rs. In Lakhs)
Year 1 2 3 4 5 6
[Link] Capacity
Utilization 65% 70% 75% 80% 85% 90%
Turnover
1. 46.80 49.14 51.59 54.17 56.88 59.72
Raw materials
2. 30.01 31.51 33.01 34.51 36.01 37.51
Manpower 4.00
3. 4.20 4.40 4.60 4.80 5.00
Utilities
4. 0.55 0.57 0.60 0.62 0.65 0.67
Other expenses
5. 1.44 1.51 1.58 1.65 1.72 1.80
Depreciation
6. 0.70 0.73 0.77 0.80 0.84 0.87
Total Interest
7. 0.90 0.70 0.55 0.40 0.22 0.18
Repayment of
8. 1.20 1.55 1.55 1.55 1.55 1.60
loan
Total (2 to 8)
9. 38.80 40.77 42.46 44.13 45.79 47.63
Profit before tax
10. 8.00 8.37 9.13 10.04 11.11 12.09
Provision for tax
11. 1.75 2.00 2.50 3.00 3.50 4.00
12. Profit after tax 6.25 6.37 6.663 7.04 7.61 8.09
Cash accrual 6.25 6.37 6.663 7.04 7.61 8.09
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Date:
Place Signature of the Promoter
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FINANCIAL ASPECTS
10.1. FIXED CAPITAL :
Land & Building : Leased
Machinery and Equipment:
[Link] DESCRIPTION Rate (RS)
1 Automatic Paper Cup Forming 1 nos. 7,00,000
Machine
TOTAL 7,00,000
13. RECURRING EXPENDITURE (PER MONTH ):
(A) Raw Material Per Month: Rs.
S.N DESCRIPTION QTY RATE AMOUNT
1 Coir Yarn 15000 kgs. 10.00 150,000
Total (A) 1,50,000
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(b) Salaries & Wages Per Month : Rs.
[Link] DESIGNATION NO SALARY Amount
1 Production cum Marketing 1
Self Self
Manager (Proprietor)
2 Machine Operators 1 10,000 10,000
3 Checking & Packaging Women 2 6,500 13,000
4 Office Assistant 1 6,000 6,000
Total 05 29,000
Perquisites 15 % 4,375
Total (B) 33,375
C) Utilities Per Month : Rs.
S.N DESCRIPTION AMOUNT
1 Power 5 HP 500 Units @ Rs. 8.25 per Unit 4,125
2 Machine Oil, grease & other consumables 500
Total (C) 4,625
(D) Other Expenses Per Month : Rs.
S.N DESCRIPTION AMOUNT
1 Marketing expenses & Advertisement 5,000
2 Repairs and maintenance 1,000
3 Traveling and transportation 5,000
4 Insurance 1,000
Total (D) 12,000
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14. RECURRING EXPENDITURE PER MONTH:
a + b + c + d = Rs. 2,00,000/-
15. FINANCIAL ASPECTS
20. a. Total Project Cost
a. Plant & Machinery 8,00,000
b. Working capital 2,00,000
Total 10,00,000
14.b Means of Finance Rs
By Bank 9,50,000
Promoter contribution 5% 50,000
Total 10,00,000
Finance required from the Bank 10,00,000/-
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14.c. Cost of Production Per Annum : Rs.
S.N DESCRIPTION AMOUNT
1 Total recurring cost 36,00,000
2 Interest on Bank Loan @10% 80,000
Total Depreciation on Machinery & Stabilizer
3 80,000
@10%
TOTAL 37,60,000
21. Turnover Per Annum :
By sale of 1,80,000 kgs. of Coir Rope
@ Rs. 26/- Rs. 46,80,000/-
22. Profit Per Annum :
Turnover - Cost of Production
46,80,000 - 37,60,000
= 9,20,000/-
23. % of profit on sales = Profit/annum X 100
Turnover
= 9,20,000 X 100
46,80,000
= 19.68%
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Rate of Return = Profit/annum * 100 Total Capital investment
= 9,20,000 X 100
10,00,000
= 92.00 %
24. Break Even Analysis:
(1) Fixed expenditure per annum: Rs
Interest on Loan 90,000
Total Depreciation 70,000
40% of salary and wages 13,340
40% of other expenses & Utilities 6,650
=========
1,79,990
==========
(2) Profit per annum = Rs. = 9,20,000/-
Break Even Point = Fixed Cost/annum * 100
fixed cost/annum + Profit/annum
= 1,79,990 X 100
9,75,000
= 18.45%
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25. Profitability Statement
(Rs. In Lakhs)
Year 1 2 3 4 5 6
[Link] Capacity
Utilization 65% 70% 75% 80% 85% 90%
Turnover
1. 46.80 49.14 51.59 54.17 56.88 59.72
Raw materials
2. 30.01 31.51 33.01 34.51 36.01 37.51
Manpower 4.00
3. 4.20 4.40 4.60 4.80 5.00
Utilities
4. 0.55 0.57 0.60 0.62 0.65 0.67
Other expenses
5. 1.44 1.51 1.58 1.65 1.72 1.80
Depreciation
6. 0.70 0.73 0.77 0.80 0.84 0.87
Total Interest
7. 0.90 0.70 0.55 0.40 0.22 0.18
Repayment of
8. 1.20 1.55 1.55 1.55 1.55 1.60
loan
Total (2 to 8)
9. 38.80 40.77 42.46 44.13 45.79 47.63
Profit before tax
10. 8.00 8.37 9.13 10.04 11.11 12.09
Provision for tax
11. 1.75 2.00 2.50 3.00 3.50 4.00
12. Profit after tax 6.25 6.37 6.663 7.04 7.61 8.09
Cash accrual 6.25 6.37 6.663 7.04 7.61 8.09
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Date:
Place Signature of the Promoter
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