GROUP 22ANKUR VERMABALVINDER SINGHSHIVAM GOYALPRATEEK DAHIYARAJAT
Objectives To set up a plastic recycling plant and to enable proper use of plastic To create awareness about plastic – uses and harms To earn profits by selling recycled plastics Once we capture the market we will open branches in other area and towns.
Company Overview We will create a plant (actual facilities to be shared with the recycling unit) to manufacture extruded plastic flakes (purified plastic). The extruded plastic is then molded in the various products. We will produce two types of replay plastics PVC (Polyvinyl chloride) PET (Polyethyleneterephthylene)
Mission Statement Strive to provide the excellent plastic solution to the customers at competitive prices. Continually expand our range of products. Poised to service both large and small customers.
The ProductThe products we are producing are Cleaned and recycled plastic flakes of PET and bottles, recovered from post-consumer beverage bottles. (This PET will work as raw material for packaging to various firms, not for the end user) Household finished plastic goods. We willmanufacture plastic tubes of various diameters, plastic kitchenware.(For the end user) PET flake will be sold to thermo formers (those who mold plastic sheets into usable products) primarily to be used to produce high-visibility packaging. And also to the beverage companies for packaging.
Possible Obstacles Unavailable or scarce raw material stock for production Replay is confident that it has secured good availability of low cost post-consumer PET bottles (feed stock) derived from post-consumer beverage bottles. It may be possible that we would not get desired raw material. Company may not meet environmental standards This environmentally-favorable venture provides for the development of technically feasible and economically viable solutions to PET plastic beverage bottle recycling, as well as environmentally aware in-house re-use practices which filter and return nearly all of the process water to the production lines
Industry Analysis According to the Crisil research 7360 companies are working in this industry with a turnover of Rs 9200 Crore provides employment to 3.5 million people. In India, per capita plastic consumption is one of the lowest in the world. The per capita consumption is just one fifth of world average that is 5kg.
Region wise and polymer wise turnover ofrecycling industry (in INR Crore) Region PVC PET West 156 383 East 75 86 North 338 158 South 111 139 Total 680 766
STRUCTURE OF THE PLASTICSINDUSTRY Raw Material Producers These are chemical and petroleum companies who produce "virgin" plastic (sometimes called resin or polymer) in huge quantities. Compounders These specialist companies, usually small, stock various polymers and provide the manufacturersof plastic goods with technical advice and the most suitable materials or mixtures for eachindividual need. Stockists These warehouses stock polymers and compounds but neither manufacture themselves, norprovide a compounding service.
STRUCTURE OF THE PLASTICSINDUSTRY Specialist Manufacturers or Molders These buy their raw materials from compounders. Other Manufacturers Many companies are not plastics specialists but employ molding operations in the manufactureof some other product. Fabricators These firms cut and join sheet, rod or extrusion to manufacture a variety of products.
MARKETPLACE ANALYSIS Various overseas players wish to explore the Indian market and invest in opportunities thrown open by the country, projected to be world number 3 in plastics consumption by 2010.As shown above the north region of India is specialized in recycling of PVC. So there is a great scope of PET recycling. Apart from this the other A huge market with full of opportunity. Absence of standard product and service Well connected with other rural areas Having good transportation facility
CUSTOMER ANALYSIS The customers of the plastic industry are scattered due to lack well known brand names. So our first priority will be to accumulate the defused customers. Apart from them there are few small companies that are giving compounding services. They use to collect various types of plastics flakes along with the virgin plastic and suggest customer (companies) in choosing appropriate plastic. An Asha enterprise is one compounder whom we will sell our plastics.
COMPETITOR ANALYSIS As we are also not alone as a supplier of PET to the companies as raw materials there are many companies in this region that are supplying PET. Indira Plastics is one of them who is currently selling all types of plastics items. So in case of business-to-business market they are our direct competitors. Kanpur is plastic recycling city of UP. The direct threat we will also have is with the companies operating in Kanpur. But as the distance between Kanpur and Allahabad is 200km as well as the road is not in good condition, so it will not affect much.
MARKETING STRATEGY The Company has chosen to focus on the production of plastic packaging materials from recycled post- consumer beverage bottles. We have identified a significant available market in the eastern part of UP. All of our initial marketing strategy will be to secure contracts in that segment, and after reaching full planned capacity, look to grow in concert with that segment and related markets. We see little need at present for further market research and development, and will focus on continually updating our production technology in an effort to remain in the forefront of our chosen marketplace.
PRODUCT/ SERVICE STRATEGY Hind Plastics will apply recycling and extrusion technology managed by decades of industry specific expertise to create a competitive advantage for its clients. These processes will produce clean, cost-efficient, recycled raw material for manufacturers of thermoform, laminate and other high value-added products, and high strength packaging strapping for shippers of large products and pallets, thereby reducing costs and creating a clear pricing edge among their competitors. Plastic bags and plastic sheets are now in high demand. And this demand is driven by continuously increasing promotional activities.
PRICING STRATEGY The pricing strategy we will use is penetration pricing. The price of all household plastic goods we will sell will be lower than the market price. Also for the PET flakes and bottles the price will be lower than the competitors. A lower price enables me to get contracts of PET bottles and sheets from various companies. In case of kitchenware and other household products we will provide combo offers and discounts which a common customer expects.
DISTRIBUTION STRATEGY We will have a distribution center in the Allahabad city that continuously maintains the supply of goods. So the household plastics will be sold through small local grocery shops from which the customers can get them easily. Apart from this we will hire street hawkers who will roam around the city and sell the goods door to door.
ADVERTISING & PROMOTIONSTRATEGY As described we are in both B2C and B2B so for this we will use two different promotional strategies. For B2C business we will use flyers that will have full detail of our product range, price, combo offers and discounts. These flyers will circulate through the newspapers across whole city. For B2B business we will promote through online social media and we will also develop our website through which enable us to widely spread our contact among various companies. The site will have full details of product that are available for companies as well as end user.
SALES STRATEGY Our sales strategy is totally based upon the distribution channel and the pricing strategies. We will have a distribution centre in the city that will take care of sales of household and also supply products to the wholesalers. We will also give the industrial customers a facility to order the products through our website which will help them in reducing the delivery time.
MARKETING & SALES FORECAST In the first month we will focus on the generating public visibility. The sales forecast is based on the assumption that we will sell all of the highest volume PET bottles that we can produce. Sales forecast Year 1 Year 2 Year 3 Year 4 Annual sales 1620000 2106000 2737800 3559140 Monthly sales 135000 175500 228150 296595 PET Sales 94500 122850 159705 207617 Household items 40500 52650 68445 88978.5
DEVELOPMENT The development of Hind plastics required accomplishing a series of action and formalities. Since we are new in the market we kept our production is low initially, as demand will increase the production will be enhanced respectively. The development process involves following steps: Legal formalities Office/business setup Future offerings and expansion plan
Development strategy In future we are looking for the production of a variety of plastic. These plastics will be LDPE (Low density polyethylene) HDPE (High density polyethylene)
Development strategy Our development strategy will base on timely completion of the establishment of the business centre with low execution cost. Our strategy will focus not only the current uninterrupted production of PVC and PET and acquisition of customer as fast as we can, but we will also look for the future expansion plan and execution strategy. Our future development strategy will focus on to chart out a careful plan for the future expansion and growth of our business. The development strategy will address following issue: How will we expand our services? Which are the new areas we will include to provide our services? What will be the format of the business
Management Promoters and six supporting staff will manage the company. There will be five promoters of Hind Plastics. Along with promoter five more employees will work for the accomplishment of companies’ objective.
Job description Process No of Proficiency employees Sorting 2 Unskilled Belt Conveyer 1 Semiskilled PET Separator 1 Semiskilled Packaging 4 Unskilled
OPERATIONS The facility is located at outside the city. Facility is divided in two parts Recycling and Production unit Warehouse The facility is located in an area of 3000 sqft.Apart from these two units there will be an office that will look for the perpetual supply of required raw material and also take care about the outbound logistics. The production capacity is 80kg/hr. The operations will be based upon JIT i.e. just in time. We will have contracted with the suppliers who can supply the raw material as quickly as we want. The raw material contains post consumer beverage bottles and other plastic materials. The bottles and other plastic material that can be recycled have a specific sign from which it can be identified that it can be recycled or not.
Stages of Recycling andProduction Sizing / Chipping Cleaning Segregation. Agglomerating / Colouring Extrusion / Palletisation Fabrication into end Product.
Scope of operations Now presently our production capacity is 200kg/day from which in initial stages we are utilizing around 50% of it. As the business expands we will reach to optimum capacity utilization. We are expecting that we will start producing more advance plastics in the fourth year of our operations and accordingly the sales will increase and the facility will have to be expanded.
Supply chain In the city there are various small post consumer plastic bottle collectors. To make a continuous supply of raw material we will have four suppliers with us. There will be one permanent supplier which will continuously supply the raw material. In case of excess demand other suppliers will be taken into consideration. The transportation cost will be covered by supplier only. The finished product will be stored in the warehouse and according to the demand it will be send to city distribution centre. The distribution center will directly sell the finished household plastics as well as to the small shops.
Our average daily demand of raw material is 300kg and the lead time we will keep lead time of 6hrs.We keep a safety stock of 50 kg. So the reorder point is given by Reorder point= average daily uses x lead time + safety stock Reorder point = 300 X .25day + 50 = 125 kg. So at each and everyday we will have minimum of 125kg (safety stock+ reorder point) of raw material in our inventory.
Financials Start-up Requirements Amount Start-up Expenses Legal 6,000 Stationery 500 Business Cards 500 Initial Mailing 100 Process Funding 400 Office Equipment 2,500 Total Start-up Expenses 10,000 Start-up Assets Cash Required 1,00,000 Other Current Assets 0 Long-term Assets 33,30,000 Total Assets 34,30,000 Total Requirements 34,40,000
BALANCE SHEET Sources of Funds Year-1 Year-2 Year-3 Year-4 Capital Owners capital 1930000 1930000 1930000 1930000 Surplus -136350 -68451 130274 765287 Net worth 1793650 1861549 2060274 2695287 Long Term loan Loan 1417302 1324116 1219111 1100789 Current Liabilities Creditors 70500 56722 68066 81680 Total liabilities 3281452 3242387 3347451 3877756 Application of fund Plant & M/C 3030000 2727000 2454300 2208870 Less depreciation 303000 272700 245430 220887 2727000 2454300 2208870 1987983 Land 300000 300000 300000 300000 Actual Fixed Asset 3027000 2754300 2508870 2287983 Current Assets: Inventory 97200 315900 410670 821340 Bank 10000 40000 100000 100000 Debtors 147252 132187 117911 232703 Advance to suppliers’ 0 0 210000 335730 Investment 100000 Total Assets 3281452 3242387 3347451 3877756
BREAK EVEN POINT VC Amount in Rs FC Amount in Rs Admin 3000 otherexp 6000 Interest 175550 transportation 96000 advertisement 6000 telephone 10000 Insurance 20000 wages 119250 Salary 192000 carriage inward 238500 Rent 24000 power 119250 maintenance 15000 raw material 414000 depreciation 303000 Legal 10000 total 1003000 Total 748550 contribution 617000 pv ratio 0.3808642 BEP units 1965398.703 135000 BEP SALES 15 in months 1.21 In years
Benefits of recycling Reduce Material ConsumptionOne of the largest benefits of recycling is the ability to preserve more virgin materials forlater use. While some materials have a limited amount of times that they can be recycled,many others can theoretically be recycled an infinite number of times. This is true of mostmetals, particularly aluminum and steel. Reduce Energy ConsumptionOften the energy required to recycle materials is far less than the energy required to make aproduct out of new materials. Recycled aluminum, for example, saves 95 percent of theamount of energy it takes to create it from virgin materials. Other materials save amountsthat are more modest. Recycled glass, for example, only saves about 40 percent of the initialenergy investment. Reduce the Size of LandfillsLandfill size can be drastically reduced with an aggressive recycling program. Reducinglandfill size not only leaves more land for other uses, but also minimizes the amount ofenergy required to remove and eventually relocate trash.When considering the size of landfills, also take into account the wasted area around thelandfill. Land adjacent to landfills is often only for industrial sites. Air pollution makes iteven less likely that nearby land can be used for other purposes.
Reduce PollutionWaste often creates water pollution by leaching chemicals into thesoil. While some of these chemicals are filtered out by the soil,other pollutants go on to damage ground water sources. Airpollution is also a great concern. Methane and other gases releasedin landfills contribute to global warming problems as well as airquality concerns. Creates JobsRecycling is more labor intensive than landfill management,requiring more workers to sort and process recyclable waste. Thiscan revitalize rural areas where landfills are often located, bringingneeded jobs to the region. These manual skill jobs are particularlybeneficial in areas that were once manufacturing centers.