Business Plan

Project: Paper Industry
Group Members: Imtiaz Hussain (2014-KIU-1285)
Abbas Ali (2014-KIU-1286)
Hussain Wali (2014-KIU-0091)
Adeel Ahmad (2014-KIU- )
Sadia Ali (2014-kiu- )
Submitted By: Sir Kaleem Ullah Dar
Department: Management Science
Degree: BBA (Hons)
Semester: Seventh

Table of content
S.NO Topic Page
1. Introduction…………………………………………………2
2. Historical Background………………………………….…3
3. General Company Description…………………………...5
4. Product and Services………………………………………6
5. Market Analysis……………………………………………...7
6. Market Strategy………………………………………………8
7. Operating Plan……………………………………………….11
8. Management and Organization……………………………13
9. Schedule of Startup Expenses…………………………….14
10. Project Income Statement…………………………………..15
11. Refining the Plan……………………………………………...17

I. Introduction:
Our business idea is to establish a local factory in Gilgit to produce the Paper Bags,
White Paper, and Photography Paper. The main target is to diminish the use of all type
of plastic bags used by the public especially the plastic bags distributed by retailers to
carry shopped materials, as well as to completely stop non-biodegradable plastic
products, which causes unsolvable damages to both health and environment.
A paper bag or paper sack is a preformed container made of paper, usually with an
opening at one end. It can be one layer of paper or multiple layers of paper and other
flexible materials. Paper bags are used for packaging and/or carrying items. Paper bags
are readily recyclable. Plastic or water resistant coatings or layers make recycling more
difficult.
Paper, of course comes from trees. Trees are grown or found, then marked and felled
Loges are moved from the forest to mill, where there is a three year wait for the logs to
dry before they can be used. Logs are stripped of bark and chipped into one inch
squares. The chips are cooked with tremendous heat and pressure. Then, they are
digested with limestone and sulfurous acid until the wood becomes pulp. The pulp is
washed, requiring thousands of gallons of fresh water and bleach, and then pressed
into finished paper. Cutting, printing, packaging and shipping to make paper bags
require additional time, labor and energy.
Paper must be returned to pulp by using many chemicals to bleach and disperse the
fibers. Although paper bags have a higher recycling rate than plastic, each new paper
grocery bag you use is made from mostly virgin pulp for better strength and elasticity.
Bags that are recycled are often turned into corrugated cardboard, not new paper bags.
II. Historical Background:
Paper has a long history, beginning with the ancient Egyptians and continuing to the
present day. For thousands of years, hand-made methods dominated and then, during
the 19th century, paper production became industrialized. Originally intended purely for
writing and printing purposes, a wide variety of paper grades and uses are now
available to the consumer. Of all the writing and drawing materials that people have
employed down the ages, paper is the most widely used around the world. Its name
derives from papyrus the material used by the ancient Egyptians, Greeks and Romans.
Papyrus, however, is only one of the predecessors of paper that together are known by
the generic term „Tapa‟ and are mostly made from the inner bark of paper mulberry, Fig
and Da Tapa has been found extensively in nearly all cultures along the Equatorial belt
and is made by what is possibly the oldest papermaking technique – one still practiced
in some parts of the Himalayas and South East Asia. Indeed, recent archaeological
excavations in China have revealed some of the oldest „Tapa‟ paper ever found which
shows that paper was being produced in China before western records began.

The tapa technique involves cooked baste, which is flattened with a wooden hammer to
form a thin, fibrous layer and then dissolved in a vat with water to make a pulp. A screen
consisting of a wooden frame with a fabric base is then laid in a puddle or big basin and
floats with the fabric just under the surface of the water. The papermaker then pours the
quantity of pulp needed to make one sheet into this „floating mould‟ and spreads it
evenly, by hand, across the surface. The screen is then carefully lifted out of the water,
allowed to drain off and a sheet of paper forms on the wire. Once the water has dropped
off, the screen is placed in the sun or near a fire to dry. When dry, the sheet easily peels
off and, apart from possible smoothing, requires no further treatment. This technique
has two basic drawbacks. Firstly, a separate screen is needed for each new sheet, and
is only available for use again after the last sheet has dried. And secondly, an increase
in production can soon lead to a shortage of raw material, since fresh baste is not
always available everywhere in the required quantity. The fibers normally used for
textiles, like flax and hemp, also served as substitutes for baste. In later times, the fabric
was replaced by fine bamboo sticks, which freed the papermaker of the need to let the
paper dry naturally in the mould, since the poured or ladled sheet could be „couched‟
off. Paper plays a key role in communication and as a packaging material. Demand for
paper is closely linked to prevalent economic conditions. Strong economic growth
boosts demand for paper and vice versa. In Pakistan, the first paper mill was
established in 1950. Raw materials used for the production of paper were rags and
wastepaper. Commercial production of paper was started in 1952, and raw materials
used were again non-wood fibers, that is, eulaliopsis binata and sacharum bengalense.
Development of the fractional process of pulping bamboo at the Forest Research
Institute, Dehra Dun, during 1960-62 provided an impetus to the pulp and paper industry
in the country, and bamboo became the main raw material for making various grades of
paper. Turing establishments cut and coat paper and foil. Stationery product
manufacturing establishments make a variety of paper products used for writing, filing,
and similar applications. Other converted paper product manufacturing includes, in
particular, the conversion of sanitary paper stock into such things as tissue paper and
disposable diapers.
Industries in the Paper Manufacturing subsector make pulp, paper, or converted paper
products. The manufacturing of these products is grouped together because they
constitute a series of vertically connected processes. More than one is often carried out
in a single establishment. There are essentially three activities. The manufacturing of
pulp involves separating the cellulose Fibers from other impurities in wood or used
paper. The manufacturing of paper involves matting these fibers into a sheet. Converted
paper products are made from paper and other materials by various cutting and shaping
techniques and include coating and laminating activities. The Paper Manufacturing
subsector is subdivided into two industry groups, the first for the manufacturing of pulp
and paper and the second for the manufacturing of converted paper products. Paper
making is treated as the core activity of the subsector. Therefore, any establishment
that makes paper (including paperboard), Either alone or in combination with pulp
manufacturing or paper converting, is classified as a paper or paperboard mill.
Establishments that make pulp without making paper are classified as pulp mills. Pulp
mills, paper mills and paperboard mills comprise the first industry group.

III. General Company Description:
A paper bag or paper sack is a preformed container made of paper, usually with an
opening at one end. It can be one layer of paper or multiple layers of paper and other
flexible materials. Paper bags are used for packaging or carrying items.
Plastics are used globally in industries like packaging, construction and medical
equipment among others. This is because plastics are durable, water-proof, lightweight
and versatile. However, some countries use them more than others due to certain
socio-economic factors. Pakistan has witnessed rapid growth in the last decade or so.
This has been in terms of population as well as GDP per capita, both of which have
more than doubled in this period. The above two factors result in higher consumer
spending. Moreover, the latter translates to greater importance, given to „convenience
and hygienic shopping‟ resulting in higher demand for plastics in packaging and
shopping.
All this consequently leads to increased waste generation. From the supply side also,
plastic manufacture (for all purposes including packaging) is a booming industry in
Pakistan. One factor for it being abundance of petrochemicals, the raw material for
plastics, in this region.
The plastic bags are used for an average of five minutes, but takes over thousands of
years to decompose in landfills, they don't biodegrade, but are broken into smaller
fragments that are toxic and contaminate soil and waterways. Plastic bags are also
posing as a danger to animals, as they often mistake them for food and die after
swallowing it.
 Vision:
Our vision is to establish a local paper bags factory, to be one of the best national
manufacturers. Moreover, to maintain continuous development in the factory, while
maintaining high quality of products and services in environmentally responsible
practices.
 Mission Statement:
Our missions are to go beyond customer satisfaction by providing high quality products
and services, while still being able to conduct our business in a manner that is
environmentally sustainable. We will pursue processes that are designed to maximize
efficient, minimize waste of materials and conserve resources, in order to provide our
customers and stakeholders with products that are long lasting by providing an excellent
performance.
 Keys to Success:
 Environmentally beneficial products.
 Harness our growth potential and sustain profitable growth.

 Qualified and experienced employees.
 Competitive pricing.
 Communicate with our clients through the website.
 Being able to maintain success over time while adjusting to meet the changing
demands and buying habits of the customer.
 Objectives:
 To provide top quality of paper bags.
 To achieve customer satisfaction levels.
 To diminish the use of all type of plastic bags used by the public.
 To make our brand one of the best international manufacturers.
 To make our products be the first choice for the customers and stakeholders.
IV. Product and Services:
 Products:
We make several types of product which are mention below:
 High Quality Paper
 Paper Bags
 Bottle caps.
 Food wrappers.
 Picnic items such as cups.
 Aluminum cans.
 Cigarette butts.
 Rope.

 Services:
 Customers can call our head to place an order of product, and the
product is delivered to the customer's home.
 Customers can go to the nearest shop to buy products.
 Online service where customer place order to buy products.
V. Marketing Analysis:
 Analysis of the targetmarket:
 Our target market defines them as a public Product. We are targeting everyone
whereas our competitors target a certain gender or age. But we target a wide
range of customers.
 There are few competitors of paper industry in gilgit market so it is opportunity for
us to success our business and create long relation with customers.
 We try to offer something different with our product as well. We offer a range of
stuffed crusts to try and attract customers.
 Analysis of the Competition:
Our competitor’s products are Copy Paper and Photography paper But we provide high
quality and new product to our customers such as paper bag which is new innovation in
gilgit market. Other product include High quality paper, Bottle caps, Food wrappers,
Picnic items such as cups, Aluminum cans, Cigarette butts and Rope.
These entire products we provide to our customers at reasonable price.
 Marketsegmentation:
 Retailers.
 Restaurants & Cafes.
 Groceries.
 Governmental events.

We are planning to establish our factory in Gilgit Market, so we will be targeting Gilgit
and Danyore markets at the first stage, but later on, we will expand our network to cover
all surrounding market in the future.
VI. Market Strategy:
 Competitive Edge:
 Environmentally beneficial products.
 Deliver high quality and cost competitive products.
 To be the first choice to the customers.
 Enterprise management System.
 Custom Made Products.
 MarketingMix:
Product
V shape paper bags with gusset and without, with window strip application of various
sizes and four different colors.
Price
The average price for the paper bags depends on the following factors:
 GSM (Grams per square meter) of the paper.
 Lamination type.
 Coloring.
 Size.
 Any specific demand (die cutting, trimming, etc)
In the full feasibility study, our pricing model will be based on the breakeven cost
analysis. Finally, adding the appropriate profit margin after a general market overview.

Place
 Accessibility: The importing of raw materials and exporting of finished products
can be done easily.
 Availability of water and power.
 The efficiency of the transportation service.
 Access to markets is available.
 Away from the residential areas.
Promotion
 Introduce the services and update pricing strategy.
 Direct Marketing sites visits, to offer free samples and to present our products.
 Best way to compete is know when you breakeven.
 Aiming the client satisfaction to avail the new opportunities.
 List our company in the Directory.
 Advertise everywhere with vehicle magnets.
 Build a website to introduce our services and all related subjects.
 Online advertising (Websites & Social Media).
 Build a website to introduce our services and all related subjects.
 Online advertising (Websites & Social Media).
 SWOT Analysis:
Strengths
Some strength in promoting to be environmentally friendly includes stopping the
distribution of plastic bags, and encourages consumers to buy the paper bags or bring
their own bags. The store used such strategy includes Whole Food Market. They
stopped the use of plastic bags, and forces consumers to bring their own bag or
purchase their company’s reusable bags. This is way for the stores to increase sales,

meanwhile, also encourage in saving the environment. (Improve sales, and promote
ecofriendly). The other strength points are:
 Experience and knowledge in the same field.
 Location advantages.
 Pricing and quality of products.
Weakness
Considering the target audience as all residence in United Gilgit area, one of the major
weaknesses faced by this campaign is how to reach the audience base and conduct
effective communications with them. Through posters and social media, we can only
reach a small fraction of the audience who are supposed to be active and young.
However, a large part of the consumers group for local grocery shopping is from middle
aged or elder people, who have limited time and energy to participate in social activities.
Thus the influence of this campaign would become restricted. On the other hand, the
middle aged and elder consumers have already built up their lifestyle and purchasing
habits and many of them are used to getting plastic bags while shopping. It’s more
difficult to change their habits than that of younger people. The other weakness points
are:
 Weak financial position
 Lack of financial resources
Opportunities:
In addition, new technology has been introduced to different fields in manufactory. By
taking advantage of technology development, we can use recyclable resources to
produce the low cost environment friendly paper bag up to national standards, which
reduces the cost and saves resources. At the same time, the low cost element will make
the bag popular and competitive. The other opportunity points are:
 Industry trends.
 Technological innovations and development.
 Global influences.
 Exports and imports.
Threats:
 Predatory pricing by competitors
 Loss of key staff

VII. Operating Plan:
 Production:
Production Techniques
Process Production is also a very common method of production. Flow production is
when the product is built up through many segregated stages; the product is built upon
at each stage and then passed directly to the next stage where it is built upon again.
The production method is financially the most efficient and effective because there is
less of a need for skilled workers.
Quality Control
After a product is finished it will be evaluated by a quality inspector who will ensure that
there are no defects in the products and if passed it can further proceed to the next
area.
Customer services
We will have services like product exchange or money refunding if the product is
defective or we are also planning on launching an online website for online or telephonic
ordering of our products.
Inventory control
For inventory control we will use “First in First out” accounting method. Because this
method suite to sell new design product first.
Product Development
For the development of the product in future we will analyze our performance in the
market and use customer feedback to improve our product quality.
 Location:
 The total amount of space should be at least a 5 kanal plot.
 The building will be warehouse type where several department for different
stages of production and also a separate warehousing facility.
 Zoning of the business should be in Jutial Gilgit.
 A proper place with availability of water, transport, and electricity facility.

 Our business hours will be 7:00 ‘o’clock in morning to 3:00 ‘o’clock in evening.
 Legal Environment:
 Our company will be registered under the companies’ ordinance 1984.
 We will not compromise on quality and provide better quality and safe product.
 Personnel:
The total number of employees will be 30 who will work on daily basis in the company.
Employees No of employees Salaries for each
employee (PKR)
Workers(labors) 10 20,000
Sales manager 2 30,000
Accountants 4 30,000
Material purchasers 8 20,000
Security Guards 4 20,000
Quality inspectors 3 25,000
Reception(Facilitator) 1 20,000
 Inventory:
In our inventory we will have different raw materials of different type of papers and we
require stuff to packaging those products in a better way.
 Suppliers:
Our suppliers are Allied Paper and Mushtaq and CO. Because they provide better
quality of raw material at reasonable price.
 CreditPolicies:
We have not considered credit polices at this stage but will try to accumulate it also if
needed.

VIII. Management and organization:
As board of directors we will hire 30 employees and also each partner will take over the
below departments.
 Professionaland Advisory support:
Board of Directors
We ourselves as the true owners of the company will be the board of directors our names are
respectively.
 Imtiaz Hussain
 Abbas Ali
 Hussain Wali
Board of Directors
Production
Department
Investment
department
Technical
Department
Marketing
Department
HR
Department

IX. Schedule of Startup Expenses:
Paper Products
Schedule of Startup Funds Required
Prepared by the owner, Imtiaz Hussain
Startup funds available: $50,000.00
Equipment Required: Price Ea. Qty. Needed Total
Paper cleaner machine $1,000.00 1.00 $1,000.00
Paper Whitening machine $4,000.00 1.00 $4,000.00
Paper Scanning machine $1,500.00 2.00 $3,000.00
Labeling machine $800.00 1.00 $800.00
Furniture $500.00 2.00 $1,000.00
Technological Gadgets $2,000.00 1.00 $2,000.00
Others $1,000.00 1.00 $1,000.00
Materials and Supplies:
Wood $2.50 3125.00 $7,812.50
$1.50 1300.00 $1,950.00
Water $2.00 1200.00 $2,400.00
Fibre $1.00 200.00 $200.00
Chemicals
Sheets $100.00 5.00 $500.00
Others $100.00 5.00 $500.00
Total Startup Funds Required: $25,162.50
Startup Funds Left Over: $24,837.50

X. Projected Income Statement:
Paper Products
Projected Income Statement – 2017
Prepared by the owner, Imtiaz Hussain
REVENUE:
Sales: Customers Price Totals
Paper Bag 60000 $10.00 $600000.00
A4 Paper 50000 $2.00 $100000.00
Paper Glass 40000 $5.00 $200000.00
Gypsum 6000 $50.00 $300000.00
Bottle Cap 7250 $0.50 $3625.00
Cigarette butts 20000 $0.20 $4000.00
Photo Paper 10800 $5.00 $54000.00
Total Sales: $1261625.00
Less Packaging and Labeling $150000.00
Total Net Sales: $1111625.00
LESS COST OF GOODS SOLD:
Item Estimate Qty. Price Ea. Totals
Paper Bag 160000 $2.50 $400000.00
A4 Paper 54000 $1.50 $81000.00
Paper Glass 40000 $2.00 $80000.00
Bottle Cap 5000 $1.00 $5,000.00
Total Cost of Goods Sold: $566000.00
Gross Profit: $545625.00
OPERATING EXPENSES:
Item Expense Totals
Rent expense 5726.56 $5,726.56
Salaries 41803.9 $41,803.90
Utilities 11453.12 $11,453.12
Transportation 6871.87 $6,871.87
Repair and Maintenance 5726.56 $5,726.56
Others 3000 $3,000.00
Total Operating Expenses: $74,582.01
Net Income: $471042.99

XI. Refining the plan:
 For Raising Capital:
The amount of the loan that we will require will be 30 lac Pakistani rupees because
we already have personal capital of 20 lac which will be invested by all the partners
and the total capital required to initialize the business is 50 lac.
The funds will be used in manufacturing paper products and selling them across the
G-B market.
Through this investment we can create a new venture which will not only be a role
model in the G-B but also will bring new investment opportunities for the
GilgitBaltistan citizens as the business will expand in future as we expect.
 Manufacturing:
Chipping
Pulping
Bleaching
Additives
Water
Remove

 Production Capacity of Equipment:
Equipment Capacity/Limit
Paper Cleaner Fifteen hour regularly work
Paper Whitening Twelve hours regularly work
Paper Scanning Twelve hours regularly work
Labeling machine Fourteen hours regularly work
 Purchasing and Inventory managementprocedure:
The raw material will be purchased on huge amount and will be stored in our warehouse
and for inventory as we already mentioned before will have a separate compartment
where the product will be stored and for which we will use FIFO method.

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