PRODUCT PROJECT REPORT

A
PRODUCT PROJECT REPORT
On
PAPER CUP
Submitted By
Krishna R. Makhesana
T.Y.B.B.A. (A)
Roll No. 40
Guided By
Prof. Ajay Jayswal
Submitted To
Saurashtra University
Rajkot
Shri Patel Kelvani Mandal College of
Technology
College Road, Junagadh.
Academic year
2016-2017

DECLARATION
I, undersigned, Krishna R. Makhesana the student of
T.Y.B.B.A., Here by declared that this Project work is my own
work and it has been carried out under the guidance of Prof. Ajay
jayswal of Shri P.K.M. College of Technology & B.Ed. This
work has not been previously submitted to any other University or
institution for any examination.
Place: Junagadh
Date: 26th
Sept, 2016
(Signature)
(Krishna R. Makhesana)

PREFACE
Being a student of TYBBA I am extremely happy to submit
this project report on small scale industry under the prescribed
syllabus of Saurashtra University for particularly introducing a
subject “Entrepreneurship”. Entrepreneurship is management of
SSI with a view to create and develop such skill and attitude
among the student in practical and professional education faculty.
The goal or object of this report is to make student learn
about various factors that should be a kept in mind before starting
up and industry in other words, it is purely entrepreneurship
development and training for establishment of SSI.
The contribution of SSI is 45% in the economic growth of
the country. So it becomes essential to study the management and
working of SSIs as a student of management.

ACKNOWLEDGEMENT
It is really the matter of a great pleasure for me to undertake
and presents this creative and practical work, a product project
report of TYBBA on Paper cup.
This report has been prepared by keep in mind various
aspects relating to financial capacity of the plant which is to be an
established, the fast growth and development in the field of paper
cup industry.
I sincerely thank Prof. Ajay jayswal for their guidance and
encouragement in carrying out this project work. I would also like
to express my gratitude to SSIs and all those who have assisted me
during the period of my project work.
Finally yet importantly, the help & support of my friends and
professors have made this venture successful. Therefore, I would
like to thank them all from care of my heart.
- Krishna R. Makhesana

INDEX
Sr.
No
Particulars Pg.
No
.
1 Project At Glance
2 Owners & Promoters Bio-Data
3 Paper Cup Varieties
4 Project Location’s Justification
5 Introduction of Product
6 History of Product
7 Market Potential
8 Production Schedule
9 Financial Aspects
10 Means of Finance
11 Financial Analysis
12 Profitability of project
13 Project summary
14 Balance sheet for 5 years
15 B.E.P. statement for 5 years
16 Project Advancement and Future
Planning
17 Bibliography

PROJECT AT GLANCE
Name of the Unit: Radhe Paper cup
Address for communication: 367, GIDC-1,
Dolatpara,
Junagadh - 362001
Type of Unit: Small Scale Industry
Name of product: Paper cup
SSI Registration No.: Apply for registration
Subsidy Registration No.: Apply for registration
Details of the Location & Unit: 368, GIDC – 1,
Dolatpara,
Junagadh - 362001
Partner’s Name & Address: Krishna R. Makhesana
Ta.- Junagadh
Dis.- Junagadh
Mo.-
Denisha A. Ladani
Ta.- Keshod
Dis.- Junagadh
Mo.-

OWNERS & PROMOTERS BIO-DATA
(PARTNER’S DETAILS)
There are mainly two partners:
A. Krishna R. Makhesana
B. Denisha A. Ladani
(A) Krishna R. Makhesana
Name : Krishna R. Makhesana
Age : 20 years
Religion : Hindu
Address for Communication :
Financial Contribution : 50%
Responsibility : Finance dept. Manager
Education : undergoing BBA from
Saurashtra University
Share in profit : 50%
(B) Denisha A. Ladani

Name : Denisha A. Ladani
Age : 23 years
Address for communication :
Financial Contribution : 50%
Responsibility : Marketing Dept. Manager
Education : MBA from Gujarat
University
Share in profit : 50%

PROJECT LOCATION’S JUSTIFICATION
Location is the prime factor which has to be considering for
starting a new business. The location should be decided by considering all
factors and making independent analysis of each variable separately
through cost benefit analysis and the location should either be near to the
market (i.e. customers) or where the raw material is easily available in
adequate quantity.
 Availability of raw material :
The raw material is an important and initial part of
Production process. It should be easily available at reasonable price
and time because it is first step of production process for any
industry.
In case of this industry the basic raw material is paper
which are available from nearby districts. Our Raw material
supplier is Luxurious Paper Products, Metoda GIDC, Rajkot.
 Labour resources:
Labour resources are the second important thing for
any industry for effectively running and achieve maximum
production. Labour should be available at least cost.
In this case 1 sales cum production manager, 1 skilled
and 1 unskilled labour required which is available from nearby
area.

 Electricity supply:
The continuous electricity supply is very important for
manufacturing process of this unit to run the machines. And due to
residential area the electricity company provides electricity
continuous and at a current rate.
 Transportation facilities:
Transport the raw material and finished products from
one place to another place each industry should required of good
transport facility. There are many transport companies situated in
nearby area.
 Market facilities:
The demand of paper cup is increasing at a very high
rate because it is easy to use, hygienic and eco-friendly. 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
indigenously available and the manufacturing process is also
simple.
Paper Cup find potential market in IT companies,
Educational Institutions Canteens, Industrial Canteens,
Restaurants, Fast Foods, Catering People, Tea Shops, Paper
Product Dealers and Super Markets.

 Miscellaneous Factors:
We have selected our location on the basis of
following factors.
a) Availability of infrastructural facility.
b) Availability of Banks or financial institution.
c) Availability of bodies such as Hospitals,
dispensaries, post office, etc… enjoyed by the
communities.

Location
 Registered office:
367, GIDC-1,
Dolatpara,
Junagadh - 362001
 Production Location:
“RADHE PAPER CUP”
368, GIDC – 1,
Dolatpara,
Junagadh - 362001

INTRODUCTION OF PRODUCT
A paper cup is a disposable made out of paper and after lined
with plastic or wax prevent liquid from leakage out or soaking by paper.
Paper cups are made from renewable resources. The cups should be made
from food grade paper which is hygienic in nature. It is capable for
holding both hot & cold liquid for longer time. The uses of paper cups
have wide range. Give the rapid changes in life style; it is the right time to
enter the consumer segment to popularize the home consumption 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 & 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.

HISTORY OF PRODUCT
A paper cup is a disposable cup made out of paper and often
lined with plastic or wax to prevent liquid from leaking out or soaking
through the paper. It may be made out of recycled paper and widely used
around the world.
Paper cups have been documented in imperial China, where
paper was invented by 2nd
century BC. Paper cups are known as chih pei
and were used for serving of tea. They were constructed in different size
and colors, and were adorned with decorative designs. Textual evidence
of paper cups appears in a description of the possessions of the Yu
family, from the city of Hangzhou.
The modern paper cups are developed in the 20th
century. In
the early 20th
century, it was common to have shared glasses or dippers at
water sources such as school faucets or water barrels in trains. This
shared use caused public health concerns.

MARKET POTENTIAL
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, per capital
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
indigenously available and the manufacturing process is also simple.
Paper Cup find potential market in Educational Institutions
Canteens, Industrial Canteens, Restaurants, Fast Foods, Catering
People and Super Markets.

PRODUCTION SCHEDULE
A. Production process of paper cup:
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 sidewall 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, curling rim and so on
mechanisms, which are the important parts in finishing paper
cup.

PE cotted
paper roll
Cutting the
Cup wall and
bottom
Cup wall
sealing
Bottom
Inlaying
Finishing
Paper Cup
Cup checking

B. Production capacity
Installed 100%:
The production Capacity of this established plant will be
30,000 nos. of paper cups per day.
Utilized 50%:
The production Capacity of this established plant will be
15,000 nos. of paper cups per day.
The schedule for production would be as follows:
9 a.m. to 1 p.m.
&
3 p.m. to 7 p.m.
The whole production process would be carried out
simultaneously and the post production will also be speedily.

FINANCIAL ASPECTS
A. Fixed capital
i. Land and Building:
Sr. No. Particulars Sq. m. Price (Per
Sq. m.)
Total value
(Rs.)
1 Land 100 15,000 15,00,000
2 Building 50 10,000 5,00,000
Total 20,00,000
ii. Machinery and Equipments
Sr.
No.
Description Quantity Rate Value
1 Machine 1 6,60,000 6,60,000
2 Dyes 1 50,000 50,000
3 Office equipments and
furniture
- 50,000 50,000
4 Electrification and
installation
- 10,000 10,000
Total 7,70,000
iii. Pre operative expenses 10,000
Total Fixed capital (i + ii + iii) 27,80,000

B. Working capital
i. Salary (Per Month):
Sr. No. Description No. Salary Total
1 Sale Cum Production manager 1 15,000 15,000
2 Skilled Worker 1 10,000 10,000
3 Unskilled Worker 1 5,000 5,000
Total 30,000
ii. Raw Materials Requirements (Per Month):
Sr. No. Description Quantity Rate Value
1 Printed PE Paper 700 Kg 90 63,000
2 Bottom Reel 300 Kg 80 24,000
3 Packing Material 5,000
Total 92,000
iii. Utilities (Per Month):
Sr. No. Description Amount
1 Power 1,500 units @ Rs. 4/- 6,000
2 Water, Machine Oil and Grease 500
Total 6,500

iv. Other Expenses (Per Month):
1 Postage and Stationary 300
2 Transportation Charge 9,500
For raw material 5,000
Packing material 2,000
Transport for sending Cup Box 2,500
3 Maintenance Charge 500
4 Phone 600
5 Consumable Stores 1,000
Total 11,900
Total Working Capital for 3 months (i + ii + iii + iv):
1 Raw material (92,000 x 3) 2,76,000
2 Utilities (6,500 x 3) 19,500
3 Salary (30,000 x 3) 90,000
4 Other Exp. (11,900 x 3) 35,700
Total 4,21,200

TOTAL CAPITAL INVESTMENT:
Fixed Capital : 27,80,000
(+) Working Capital for 3 months : 4,21,200
Total : 32,01,200
MEANS OF FINANCE
(1) Makhesana Krishna R. 16,00,600
(2) Ladani Denisha A. 16,00,600
Total Capital Investment 32,01,200

FINANCIAL ANALYSIS
A. Cost of Production (Per Year):
1 Total Recurring Cost 16,84,800
2 Depreciation on Land @ 10% 1,50,000
3 Depreciation on building @ 5% 25,000
4 Depreciation on Machine @ 10% 66,000
5 Depreciation on Dye @ 8% 4,000
6 Depreciation on Furniture @ 8% 4,000
Total 19,33,800
B. Turnover (Per Year):
Sr. No. Description Qty Rate(Rs.) Value(Rs.)
1 Paper Cups 45,00,000 0.55 24,75,000
Total 24,75,000
C. Net Profit (Before Taxation)(Per Year):
Turn Over : 24,75,000
(-)Cost of Production : 19,33,800
Total : 5,41,200

PROFITABILITY OF PROJECT
Particulars Amount
Sales and production 24,75,000
Raw materials 11,04,000
Salary & wages 3,60,000
Electricity Consumed 72,000
Repairs and Maintenance 6,000
Transportation Charges 1,14,000
Taxes – Insurance 2,65,373
Depreciation 2,49,000
Administrative Expenses 10,800

PROJECT SUMMARY
Particular Amount
Sales 24,75,000
(-) Variable cost (-) 11,76,000
Contribution 12,99,000
(-) Fixed cost (-) 5,02,800
PBIT 7,96,200
(-) Tax (33.33%) (-) 2,65,373
PAT 5,30,827

BALANCE SHEET FOR 5 YEARS
For 2016-17
Liabilities Amount Assets Amount
Capital (1:1) Land 15,00,000
Krishna - 13,90,000 (-) Dep. 1,50,000 13,50,000
Denisha - 13,90,000 27,80,000
Building 5,00,000
(-) Dep. 25,000 4,75,000
Machine 6,60,000
(-) Dep. 66,000 5,94,000
Profit (1:1) Dye 50,000
Krishna - 265413.5 (-) Dep. 4,000 46,000
Denisha - 265413.5 5,30,827
Furniture 50,000
(-) Dep. 4,000 46,000
Cash & Bank Balance 7,99,827
33,10,827 33,10,827

For 2017-18
Capital (1:1) Land 13,50,000
Krishna - 13,90,000 (-) Dep. 1,50,000 12,00,000
Denisha - 13,90,000 27,80,000
Building 4,75,000
(-) Dep. 25,000 4,50,000
Machine 5,94,000
(-) Dep. 66,000 5,28,000
Profit (1:1) Dye 46,000
Krishna - 3,52,017.5 (-) Dep. 4,000 42,000
Denisha - 3,52,017.5 7,04,035
Furniture 46,000
(-) Dep. 4,000 42,000
34,84,035 34,84,035

For 2018-19
Capital (1:1) Land 12,00,000
Krishna - 13,90,000 (-) Dep. 1,50,000 10,50,000
Denisha - 13,90,000 27,80,000
Building 4,50,000
(-) Dep. 25,000 4,25,000
Machine 5,28,000
(-) Dep. 66,000 4,62,000
Profit (1:1) Dye 42,000
Krishna - 4,38,622 (-) Dep. 4,000 38,000
Denisha - 4,38,622 8,77,244
Furniture 42,000
(-) Dep. 4,000 38,000
36,57,244 36,57,244

For 2019-20
Capital (1:1) Land 10,50,000
Krishna - 13,90,000 (-) Dep. 1,50,000 9,00,000
Denisha - 13,90,000 27,80,000
Building 4,25,000
(-) Dep. 25,000 4,00,000
Machine 4,62,000
(-) Dep. 66,000 3,96,000
Profit (1:1) Dye 38,000
Krishna - 5,25,226.5 (-) Dep. 4,000 34,000
Denisha - 5,25,226.5 10,50,453
Furniture 38,000
(-) Dep. 4,000 34,000
38,30,453 38,30,453

For 2020-21
Capital (1:1) Land 9,00,000
Krishna - 13,90,000 (-) Dep. 1,50,000 7,50,000
Denisha - 13,90,000 27,80,000
Building 4,00,000
(-) Dep. 25,000 3,75,000
Machine 3,96,000
(-) Dep. 66,000 3,30,000
Profit (1:1) Dye 34,000
Krishna - 6,11,830.5 (-) Dep. 4,000 30,000
Denisha - 6,11,830.5 12,23,661
Furniture 34,000
(-) Dep. 4,000 30,000
40,03,661 40,03,661

B.E.P. STATEMENT FOR 5 YEARS
Particulars 1st
year 2nd
year 3rd
year 4th
year 5th
year
50% 60% 70% 80% 90%
Sales 24,75,000 29,70,000 34,65,000 39,60,000 44,55,000
Less Variable
Exps.
Raw materials 11,04,000 13,24,800 15,45,600 17,66,400 19,87,200
Electricity 72,000 86,400 1,00,800 1,15,200 1,29,600
Total
Variable
Exps.
11,76,000 14,11,200 16,46,400 18,81,600 21,16,800
=
Contribution
12,99,000 15,58,800 18,18,600 20,78,400 23,38,200
Less Fixed
Cost
Salary &
wages
3,60,000 3,60,000 3,60,000 3,60,000 3,60,000
Postage and
Stationary
3,600 3,600 3,600 3,600 3,600

Transportation
Charge
1,14,000 1,14,000 1,14,000 1,14,000 1,14,000
Maintenance
Charge
6,000 6,000 6,000 6,000 6,000
Phone 7,200 7,200 7,200 7,200 7,200
Consumable
Stores
12,000 12,000 12,000 12,000 12,000
Total Fixed
Exps.
5,02,800 5,02,800 5,02,800 5,02,800 5,02,800
Net Profit 7,96,200 10,56,000 13,15,800 15,75,600 18,35,400
B.E.P. 38.70% 32.25% 27.65% 24.19% 21.50%

P.V. Ratio:
Contribution
= x 100
Sales
12,99,000
= x 100
24,75,000
= 52.48%
Break Even Point (in Rs.):
Fixed Cost
= x 100
P.V. Ratio
5,02,800
= x 100
52.48
= 9,58,079

PROJECT ADVANCEMENT AND FUTURE
PROSPECTS
Owing to the demand and sales of this product it seems that
this product has a good demand in future because of our product is Eco-
friendly and as today customers are aware about the importance or
benefits of Paper cups in compare to other material.
Today in our society 90% of people are using paper cups or
other material’s cups and that’s why we have open market for our
product. In future people will take turn towards our product after knowing
benefits of Paper Cups.
Now a day’s Paper cups are using in every field like,
marriages, Coffee Shops, Tea shops, Educational institutions canteens,
Industrial canteens and IT companies canteens etc. So we can expand our
production and types of Paper Cups in the sense of different types of
pictures on cups.

BIBLIOGRAPHY
Books:
 Production Management
- By: Himalaya Publishing House
 Marketing Management
- By: Tapan K. Panda
 Financial Management
- By: B.S. Shah
 Human Resource Management
- By: K. Aswathappa
Websites:
 www.google.com
 Wikipedia

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