PROJECT REPORT
Of
PP WOVEN BAGS
PURPOSE OF THE DOCUMENT
This particular pre-feasibility is regarding PP Woven Bags.
The objective of the pre-feasibility report is primarily to facilitate potential entrepreneurs in project
identification for investment and in order to serve his objective; the document covers various aspects
of the project concept development, start-up, marketing, finance and management.
[We can modify the project capacity and project cost as per your requirement. We can also prepare
project report on any subject as per your requirement.]
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27/1/B, Gokhlley Marg, Lucknow-226001
Delhi Office : Multi Disciplinary Training
Centre, Gandhi Darshan Rajghat,
New Delhi 110002
Email : [email protected]
Contact : +91 7526000333, 444, 555
PP WOVEN BAG
Introduction
Woven fabric is a textile formed by weaving. It is produced on a loom,
and made of many threads woven on a warp and a weft. Woven
polypropylene or simply woven PP bags are considered to be the
toughest packaging bags, widely used to pack materials for grain, milling
and sugar industry.
PP oriented strips are becoming increasingly popular in India & have
caught the eye of many end users for their requirement of packing
materials. They have become popular on account of their inertness
towards chemical, moisture & excellent resistance towards rotting &
fungus attack. They are non-toxic. Lighter in weight & have more
advantages than conventional bags.
Product Application and uses
HDPE/PP Woven bags ideally suitable for Building Materials, Cement,
fertilizers, Urea, Potash, plastic, polymers, plastic pellets, etc.
Food grains: Rice, Wheat, Pulses, Tea, Coffee, Beans, Peanuts, Sand,
Sugar.
Chemicals: Pigments, Dyestuffts, oxides, barytes, alumina, hydrates,
ores, gypsum, feldspar, mica, Lime, limestone, Woven Packaging
Fabrics, Woven bags and fabrics are often used as an industrial
packaging material. The packaging bags and fabrics are available
mostly in HDPE (High Density Polythene) and PP (Polypropylene).
Depending on end use these are either laminated, or supplied without
lamination. These materials are valuable for applications in many
different industries. Any entrepreneur venture into this field will be
successful.
Benefits of PP Woven Bag
Some of the strong features of PP bags/Sheets are noted here:
Protects Products or commodities, ensuring safe storage
Extends the shelf Life
Prevents spoilage
Eco-friendly and pocket-friendly
100% reusable and durable
Light in weight and flexible
Excellent resistance to stress and high resistant to cracking
Humidity and Dust proof
Easy to clean and anti-bacterial
Breathable or water proof with a laminated film
Can be colored or printed
Can be stored in an open area.
PP Woven Bag Market Analysis
At present there is underutilization of existing capacity due to marketing
problems after introducing of Jute packaging Mandatory Order 1986.
The demand for woven sacks is sluggish for a variety of reasons. A few
years back Flat looms were used for the manufacture of woven sacks.
Now it has been manufactured on circular looms, which have high
productivity. This helped in minimizing the cost of production; however
due to high cost of jute bags & also due to resistance to chemicals.
Moisture etc. most of industry prefer HDPE/PP woven sacks for
packaging.
The polypropylene woven bags and sacks market to record a moderate
4.0% volume CAGR through the period of forecast, 2018 to 2028.
Description of Machinery & Equipment
Following machineries are required for PP Woven Bag manufacturing
process:
3 colour woven bag flexo printer: 6 colour woven bag printer can be
taken instead of 3 colour flexo printer (at larger scale).
PP woven bag cutting machine
Manual stitching machine
Manufacturing Process
1. First you need to fix pp role in printing machine, for the printing of
company name logo, manufacturing date etc.
2. For print you need to add different types of flexo ink, then need to add
stereo (which is a rubber plate) which is used to print companies
profile on bags.
3. Then you need cutting machine to cut this pp role according to the
required size.
4. After cutting bags transfer to stitching section to stitch bags with the
help of stitching machine.
5. Final checking of product.
6. Then bags are ready and can be transfer to the packaging section.
Land &Building required:
Land required 4,000-5,000 square feet
Approximate rent for the same is Rs. 50,000 - 60,000 per month.
Machinery & Equipment’s required:
Name Qty Cost (Rs.)
3 colour woven Bag flexo printer 1 11,00,000
PP woven Bag cutting machine 1 10,50,000
Sewing machine (cost 18,000) 5 90,000
Sub - Total 7 22,40,000
GST @ 18% 4,03,200
Total Machine Price 26,43,200
Cost of the machine is other than transportation cost.
6 colour woven bag flexo printer average cost: Rs. 19,50,000
Raw Material Requirement
Following raw material is required as the major raw material for the PP
woven Bag.
S.N. Description Amount
1 PP Role Rs. 85-110 Per KG
2 Printing Ink Rs. 185 Per KG
3 Yarn (thread) Rs. 110 Per KG
Production of Products
This project is based upon a sample product of PP Woven Bag.
Assuming the raw material cost per KG is Rs. 100-110 and selling price
of the product is Rs. 130-150 per KG.
One KG consists approx. 40 Pieces of PP woven Bag.
Labour & Skill Requirement:
8-9 Manpower are required for the PP woven Bag manufacturing
process.
Includes:
5 Skilled Labour
2 Unskilled Labour
2 Helper
PP woven Bag license & registration
For Proprietor:
Obtain the GST registration.
Additionally, obtain the Udyog Aadhar registration Number.
Fire/ pollution NOC as required.
Choice of a Brand Name of the product and secure the name with
Trademark if required.
Implementation Schedule
S.N. Activity Time Required
(in Months)
1 Acquisition Of premises 1
2 Procurement & installation of Plant & Machinery 1
4 Arrangement of Finance 1-2
5 Requirement of required Manpower 1
Total time Required (some activities shall run 2-3 Months
concurrently)
Conclusion:
After completion of manufacturing process, product is ready to sell in the
market. PP woven Bags are used for daily routine activities. These bags
are used by various industries for packaging of their products & one can
earn a good Margin of profit by doing this business.
FINANCIAL ASSISTANCE REQUIRED
Term Loan of Rs. 25 lakh and Working Capital limit of Rs. 20 Lacs
(in Lacs)
Own Bank
COST OF PROJECT PARTICULARS AMOUNT Contribution Finance
10.00% 90.00%
Plant & Machinery 26.43 2.64 23.79
Furniture & Fixtures 1.35 0.14 1.22
Working capital 22.22 2.22 20.00
Total 50.00 5.00 45.00
MEANS OF FINANCE PARTICULARS AMOUNT
Own Contribution 5.00
Bank Loan 25.00
Working capital Limit 20.00
Total 50.00
COMPUTATION OF PRODUCTION OF PP WOVEN BAG
Items to be Manufactured
PP Woven Bag
Total woven Bag Production a day 40000 Piece
1 Kg consists 40 Bag
Machine capacity per Day 1,000 KG
machine capacity per annum 300,000 KG
wastage 5% of input
Final Output 285,000 KG
Production of PP Woven Bag
Production Capacity KG
1st year 50% 142,500
2nd year 55% 156,750
3rd year 60% 171,000
4th year 65% 185,250
5th year 70% 199,500
Raw Material Cost
Year Capacity Rate Amount
Utilisation (per KG) (Rs. in lacs)
1st year 50% 100.00 150.00
2nd year 55% 103.00 169.95
3rd year 60% 106.09 190.96
4th year 65% 109.27 213.08
5th year 70% 112.55 236.36
COMPUTATION OF SALE
Particulars 1st year 2nd year 3rd year 4th year 5th year
Op Stock - 11,875 13,063 14,250 15,438
Production 142,500 156,750 171,000 185,250 199,500
Less : Closing Stock 11,875 13,063 14,250 15,438 16,625
Net Sale 130,625 155,563 169,813 184,063 198,313
sale price per KG 135.00 139.05 143.22 147.52 151.94
Sales (in Lacs) 176.34 216.31 243.21 271.53 301.32
Utility Charges at 100% capacity (per month)
Particulars value Description
Power connection required 25 KWH
consumption per day 200 Units
Consumption per month 5,000 Units
Rate per Unit 7 Rs.
power Bill per month 35,000 Rs.
BREAK UP OF LABOUR CHARGES
Particulars Wages No of Total
Rs. per Month Employees Salary
Skilled (in thousand rupees) 10,000 5 50,000
Unskilled (in thousand rupees) 7,000 2 14,000
Total salary per month 64,000
Total annual labour charges (in lacs) 7.68
BREAK UP OF STAFF CHARGES
Particulars Salary No of Total
Rs. per Month Employees Salary
Helper 6,000 2 12,000
Total salary per month 12,000
Total annual Staff charges (in lacs) 1.44
PROJECTED PROFITABILITY STATEMENT (in Lacs)
PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
Capacity Utilisation % 50% 55% 60% 65% 70%
SALES
Gross Sale
PP Woven Bag 176.34 216.31 243.21 271.53 301.32
Total 176.34 216.31 243.21 271.53 301.32
COST OF SALES
Raw Material Consumed 150.00 169.95 190.96 213.08 236.36
Electricity Expenses 2.10 2.31 2.52 2.73 2.94
Depreciation 4.10 3.49 2.97 2.53 2.16
Labour 7.68 8.06 8.47 8.89 9.34
Repair & maintenance 3.53 4.33 4.86 5.43 6.03
Consumables 5.29 6.49 7.30 8.15 9.04
Packaging Charges 1.59 1.95 2.19 2.44 2.71
Cost of Production 174.28 196.58 219.27 243.26 268.57
Add: Opening Stock /WIP - 14.52 16.38 18.27 20.27
Less: Closing Stock /WIP 14.52 16.38 18.27 20.27 22.38
Cost of Sales 159.76 194.72 217.38 241.26 266.46
GROSS PROFIT 16.58 21.59 25.83 30.27 34.86
Interest on Term Loan 2.23 1.97 1.41 0.86 0.30
Interest on working Capital 2.00 2.00 2.00 2.00 2.00
Rent 6.00 6.60 7.26 7.99 8.78
selling & adm exp 1.98 2.70 3.19 3.70 4.23
TOTAL 12.22 13.27 13.86 14.54 15.32
NET PROFIT 4.37 8.32 11.97 15.73 19.55
Taxation 0.68 1.65 2.83 4.02
PROFIT (After Tax) 4.37 7.63 10.31 12.90 15.53
PROJECTED BALANCE SHEET (in Lacs)
PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
Liabilities
Capital
opening balance 6.37 10.00 15.31 21.71
Add:- Own Capital 5.00
Add:- Retained Profit 4.37 7.63 10.31 12.90 15.53
Less:- Drawings 3.00 4.00 5.00 6.50 8.50
Closing Balance 6.37 10.00 15.31 21.71 28.74
Term Loan 22.23 16.67 11.11 5.56 -
Working Capital Limit 20.00 20.00 20.00 20.00 20.00
Sundry Creditors 14.50 17.00 19.10 21.31 23.64
Provisions & Other Liab 0.40 0.60 0.90 1.08 1.35
TOTAL : 63.49 64.26 66.42 69.66 73.73
Assets
Fixed Assets ( Gross) 27.78 27.78 27.78 27.78 27.78
Gross Dep. 4.10 7.59 10.57 13.10 15.26
Net Fixed Assets 23.68 20.19 17.22 14.68 12.53
Current Assets
Sundry Debtors 14.70 18.03 20.27 22.63 25.11
Stock in Hand 22.02 24.88 27.82 30.93 34.20
Cash and Bank 3.09 1.17 1.12 1.42 1.89
TOTAL : 63.49 64.26 66.42 69.66 73.73
PROJECTED CASH FLOW STATEMENT (in Lacs)
PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
SOURCES OF FUND
Own Margin 5.00
Net Profit 4.37 8.32 11.97 15.73 19.55
Depreciation & Exp. W/off 4.10 3.49 2.97 2.53 2.16
Increase in Cash Credit 20.00 - - - -
Increase In Term Loan 25.00 - - - -
Increase in Creditors 14.50 2.50 2.10 2.21 2.33
Increase in Provisions & Oth lib 0.40 0.20 0.30 0.18 0.27
TOTAL : 73.37 14.50 17.34 20.65 24.30
APPLICATION OF FUND
Increase in Fixed Assets 27.78
Increase in Stock 22.02 2.86 2.94 3.10 3.27
Increase in Debtors 14.70 3.33 2.24 2.36 2.48
Repayment of Term Loan 2.78 5.56 5.56 5.56 5.56
Drawings 3.00 4.00 5.00 6.50 8.50
Taxation - 0.68 1.65 2.83 4.02
TOTAL : 70.28 16.43 17.39 20.35 23.83
Opening Cash & Bank Balance - 3.09 1.17 1.12 1.42
Add : Surplus 3.09 (1.92) (0.05) 0.31 0.47
Closing Cash & Bank Balance 3.09 1.17 1.12 1.42 1.89
COMPUTATION OF CLOSING STOCK & WORKING CAPITAL (in Lacs)
PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
Finished Goods
14.52 16.38 18.27 20.27 22.38
Raw Material
7.50 8.50 9.55 10.65 11.82
Closing Stock 22.02 24.88 27.82 30.93 34.20
COMPUTATION OF WORKING CAPITAL REQUIREMENT
TRADITIONAL METHOD (in Lacs)
Particulars Amount Own Margin Bank Finance
Finished Goods & Raw Material 22.02
Less : Creditors 14.50
Paid stock 7.52 10% 0.75 90% 6.77
Sundry Debtors 14.70 10% 1.47 90% 13.23
22.22 2.22 20.00
WORKING CAPITAL LIMIT DEMAND ( from Bank) 20.00
COMPUTATION OF DEPRECIATION (in Lacs)
Description Plant & Machinery Furniture TOTAL
Rate of Depreciation 15.00% 10.00%
Opening Balance - - -
Addition 26.43 1.35 27.78
Total 26.43 1.35 27.78
Less : Depreciation 3.96 0.14 4.10
WDV at end of Year 22.47 1.22 23.68
Additions During The Year - - -
Total 22.47 1.22 23.68
Less : Depreciation 3.37 0.12 3.49
WDV at end of Year 19.10 1.09 20.19
Additions During The Year - - -
Total 19.10 1.09 20.19
Less : Depreciation 2.86 0.11 2.97
WDV at end of Year 16.23 0.98 17.22
Additions During The Year - - -
Total 16.23 0.98 17.22
Less : Depreciation 2.43 0.10 2.53
WDV at end of Year 13.80 0.89 14.68
Additions During The Year - - -
Total 13.80 0.89 14.68
Less : Depreciation 2.07 0.09 2.16
WDV at end of Year 11.73 0.80 12.53
Additions During The Year - - -
Total 11.73 0.80 12.53
Less : Depreciation 1.76 0.08 1.84
WDV at end of Year 9.97 0.72 10.69
Less : Depreciation 1.50 0.07 1.57
WDV at end of Year 8.47 0.65 9.12
Less : Depreciation 1.27 0.06 1.34
WDV at end of Year 7.20 0.58 7.78
CALCULATION OF D.S.C.R
PARTICULARS 1st year 2nd year 3rd year 4th year 5th year
CASH ACCRUALS 8.46 11.13 13.29 15.43 17.69
Interest on Term Loan 2.23 1.97 1.41 0.86 0.30
Total 10.70 13.09 14.70 16.29 17.99
REPAYMENT
Instalment of Term Loan 2.78 5.56 5.56 5.56 5.56
Interest on Term Loan 2.23 1.97 1.41 0.86 0.30
Total 5.01 7.52 6.97 6.41 5.86
DEBT SERVICE COVERAGE RATIO 2.13 1.74 2.11 2.54 3.07
AVERAGE D.S.C.R. 2.32
REPAYMENT SCHEDULE OF TERM LOAN
Interest 10.00%
Closing
Year Particulars Amount Addition Total Interest Repayment Balance
ist Opening Balance
1st month - 25.00 25.00 - - 25.00
2nd month 25.00 - 25.00 0.21 - 25.00
3rd month 25.00 - 25.00 0.21 - 25.00
4th month 25.00 - 25.00 0.21 25.00
5th month 25.00 - 25.00 0.21 25.00
6th month 25.00 - 25.00 0.21 25.00
7th month 25.00 - 25.00 0.21 0.463 24.54
8th month 24.54 - 24.54 0.20 0.463 24.08
9th month 24.08 - 24.08 0.20 0.463 23.61
10th month 23.61 - 23.61 0.20 0.463 23.15
11th month 23.15 - 23.15 0.19 0.463 22.69
12th month 22.69 - 22.69 0.19 0.463 22.23
2.23 2.778
2nd Opening Balance
1st month 22.23 - 22.23 0.19 0.463 21.76
2nd month 21.76 - 21.76 0.18 0.463 21.30
3rd month 21.30 - 21.30 0.18 0.463 20.84
4th month 20.84 - 20.84 0.17 0.463 20.37
5th month 20.37 - 20.37 0.17 0.463 19.91
6th month 19.91 - 19.91 0.17 0.463 19.45
7th month 19.45 - 19.45 0.16 0.463 18.98
8th month 18.98 - 18.98 0.16 0.463 18.52
9th month 18.52 - 18.52 0.15 0.463 18.06
10th month 18.06 - 18.06 0.15 0.463 17.60
11th month 17.60 - 17.60 0.15 0.463 17.13
12th month 17.13 - 17.13 0.14 0.463 16.67
1.97 5.556
3rd Opening Balance
1st month 16.67 - 16.67 0.14 0.463 16.21
2nd month 16.21 - 16.21 0.14 0.463 15.74
3rd month 15.74 - 15.74 0.13 0.463 15.28
4th month 15.28 - 15.28 0.13 0.463 14.82
5th month 14.82 - 14.82 0.12 0.463 14.35
6th month 14.35 - 14.35 0.12 0.463 13.89
7th month 13.89 - 13.89 0.12 0.463 13.43
8th month 13.43 - 13.43 0.11 0.463 12.96
9th month 12.96 - 12.96 0.11 0.463 12.50
10th month 12.50 - 12.50 0.10 0.463 12.04
11th month 12.04 - 12.04 0.10 0.463 11.58
12th month 11.58 - 11.58 0.10 0.463 11.11
1.41 5.556
4th Opening Balance
1st month 11.11 - 11.11 0.09 0.463 10.65
2nd month 10.65 - 10.65 0.09 0.463 10.19
3rd month 10.19 - 10.19 0.08 0.463 9.72
4th month 9.72 - 9.72 0.08 0.463 9.26
5th month 9.26 - 9.26 0.08 0.463 8.80
6th month 8.80 - 8.80 0.07 0.463 8.33
7th month 8.33 - 8.33 0.07 0.463 7.87
8th month 7.87 - 7.87 0.07 0.463 7.41
9th month 7.41 - 7.41 0.06 0.463 6.95
10th month 6.95 - 6.95 0.06 0.463 6.48
11th month 6.48 - 6.48 0.05 0.463 6.02
12th month(Subsidy
adjusted) 6.02 - 6.02 0.05 0.463 5.56
0.86 5.556
5th Opening Balance
1st month 5.56 - 5.56 0.05 0.463 5.09
2nd month 5.09 - 5.09 0.04 0.463 4.63
3rd month 4.63 - 4.63 0.04 0.463 4.17
4th month 4.17 - 4.17 0.03 0.463 3.70
5th month 3.70 - 3.70 0.03 0.463 3.24
6th month 3.24 - 3.24 0.03 0.463 2.78
7th month 2.78 - 2.78 0.02 0.463 2.32
8th month 2.32 - 2.32 0.02 0.463 1.85
9th month 1.85 - 1.85 0.02 0.463 1.39
10th month 1.39 - 1.39 0.01 0.463 0.93
11th month 0.93 - 0.93 0.01 0.463 0.46
12th month 0.46 - 0.46 0.00 0.463 -
0.30 5.56
DOOR TO DOOR 60 MONTHS
MORATORIUM PERIOD 6 MONTHS
REPAYMENT PERIOD 54 MONTHS
DISCLAIMER
The views expressed in this Project Report are advisory in nature. SAMADHAN
assume no financial liability to anyone using the content for any purpose. All the
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reflect the views of the industry which are drawn from various research material
sources from internet, experts, suppliers and various other sources. The actual
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considering specific requirement of the project, capacity and type of plant and
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intended for general guidance only and must not be considered a substitute for a
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hereby disclaims any and all liability to any party for any direct, indirect, implied,
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