PROJECT REPORT

Of

TEXTILE RECYCLING BUSINESS

PURPOSE OF THE DOCUMENT

This particular pre-feasibility is regarding Textile Recycling Business

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.]
 PROJECT AT A GLANCE

1 Name of the Entreprenuer xxxxxxxxxx

2 Constitution (legal Status) xxxxxxxxxx

3 Father / Spouse Name xxxxxxxxxxxx

4 Unit Address : xxxxxxxxxxxxxxxxxxxxxxx

District : xxxxxxx
Pin: xxxxxxx State: xxxxxxxxxx
Mobile xxxxxxx

5 Product and By Product : COTTON FROM FABRIC WASTE

6 Name of the project / business activity proposed : TEXTILE(FABRIC) RECYCLING UNIT

7 Cost of Project : Rs.28.67 Lakhs

8 Means of Finance
Term Loan Rs.19.8 Lakhs
Own Capital Rs.2.87 Lakhs
Working Capital Rs.6 Lakhs

9 Debt Service Coverage Ratio : 2.79

10 Pay Back Period : 5 Years

11 Project Implementation Period : 5-6 Months

12 Break Even Point : 26%

13 Employment : 11 Persons

14 Power Requirement : 100.00 HP

15 Major Raw materials : Fabric Waste

16 Estimated Annual Sales Turnover (Max Capacity) : 194.40 Lakhs

17 Detailed Cost of Project & Means of Finance

COST OF PROJECT (Rs. In Lakhs)

Particulars Amount
Land (3500-4000 sqft.) Own/Rented
Plant & Machinery 20.50
Furniture & Fixtures 1.50
Working Capital 6.67
Total 28.67

MEANS OF FINANCE
Particulars Amount
Own Contribution 2.87

Working Capital(Finance) 6.00

Term Loan 19.80

Total 28.67
 TEXTILE (FABRIC) RECYCLING UNIT

Introduction: Textile recycling is the process by which old clothing and

other textiles are recovered for reuse or material recovery. The average
lifetime of a garment is estimated to be for a period of three years. After the
time period, they are thrown away as old clothes. Even useful garments are
discarded as they are no longer fashionable, or desirable. A report states that
more than one million tons of textiles are condemned every year. Huge
quantities of old clothing end up in the landfill instead of being recycled and
reused. Of the house hold garbage, textiles make about 3 percent by weight.
Textile wastes also arise during the process of yarn and fabric manufacture,
garment making, etc. They are called as post industrial wastes. All this thrown
clothing has a potential for recycling and reuse. 80 percent of the textiles that
are thrown away can be recycled and used again, whereas, currently only 25
percent is being recycled. Less than 5 percent of all the garments that is
thrown in the bin actually end up as waste.
Product Benefits: Textile recycling offers the following environmental
benefits:
 Decreases landfill space requirements, bearing in mind that synthetic
fiber products do not decompose and that natural fibers may release
greenhouse gases.
 Avoided use of virgin fibers
 Waste water reduces as it does not have to be thoroughly washed with
large volumes of water as it is done for, say, raw wool.
 Pressure on fresh resources too is reduced.
 Reduced consumption of energy and water
 Pollution avoidance

Market Potential: The basis for the growing textile recycling industry is,
of course, the textile industry itself. The textile industry has evolved into a $1
trillion industry globally, comprising clothing, as well as furniture and
mattress material, linens, draperies, cleaning materials, leisure equipment,
and many other items. The global textile recycling market grew at a CAGR of
around 19% during 2014-2019 & expected to grow at a very higher rate
during 2020-2025. Indian textile industry accounts for almost 24% of the
world’s spindle capacity and 8% of global rotor capacity. Abundant
availability of raw materials such as cotton, wool, silk and jute as well as
skilled workforce have made the country a sourcing hub for textile.

Raw material sources: Textiles for recycling are generated from two
primary sources. These sources include:
 Post-consumer, including garments, vehicle upholstery, household
items and others.
 Pre-consumer, including scrap created as a by-product from yarn and
fabric manufacture, as well as the post-industrial scrap textiles from
other industries.
Machinery Requirements: Major machinery & equipments are as
follows:
S No. Name Amount
1 Cotton Carding Machine Opener & Cleaner 1080000
650 MM Opener
250 MM Cleaner
2 Siemens Motor 423400
30HP Motor: 2*53500=107000
7.5 HP Motor: 5*17200=86000
5HP Motor: 2*12900=25800
3HP Motor: 2*9800=19600
Control Panel: 170000
Remote Box:15000
3 Spare part of Carding machine- Cyclone 75000
4 Hydraulic Bale press-50 Tonne Pressure 215000
5 Fabric waste cutting machine 245000
6 moving blade & 2 Fix Blade
Total Amount 2038400
Net Amount (Round off) 2050000

Manufacturing Process: Fabric Recycling Process:

All waste fabrics are procured form vendor and stored in raw material
warehouse as per production requirement. The raw material are brought to
plant and fed to the respective cutting machine. After this machine will cut
the fabric into desired pieces. Then put the fabric into fiber opener, in this
process fiber opener will open the fabric layer by layer & then it will go to the
fabric cleaner which will clean the fabric. After Cleaning process with the help
of bale press fabric is pressed to get the final product. Checking of final
product, packaging & sent for sale.

Area: The industrial setup requires space for Inventory, workshop or

manufacturing area, space for power supply utilities and auxiliary like
Generator setup. Also some of the area of building is required for office staff
facilities, documentation, office furniture, etc. Thus, the approximate total area
required for complete industrial setup is 3500 to 4000Sqft.
Power Requirement: The power consumption required to run all the
machinery could be approximated as 100 Hp

Manpower Requirement: There are requirement of skilled machine

operators to run the machine set. Experience quality engineers are required
for desired quality control. Some helpers are also required to transfer the
material from one work station to other. Office staffs are required to maintain
the documentation. The approximate manpower required is 11 including 1
Supervisor, 2 Machine Operator, 2 unskilled worker, 2 Helper and 1 Security
guard. 3 Skilled worker including Accountant, Manager and Sales person.

Bank Term Loan: Rate of Interest is assumed to be at 11%

Depreciation: Depreciation has been calculated as per the Provisions of

Income Tax Act, 1961

Approvals & Registration Requirement:

Basic registration required in this project:

 GST Registration
 Udyog Aadhar Registration (Optional)
 Choice of a Brand Name of the product and secure the name with
Trademark if require.
 NOC from State Pollution Control Board
Implementation Schedule:
S No. Activity Time required
1. Acquisition of premises 1-2 Months
2. Procurement & installation of Plant & Machinery 1-2 Months
3. Arrangement of Finance 1.5-2 Months
4. Requirement of required Manpower 1 Month
5. Commercial Trial Runs 1 Month
Total time Required (some activities shall run 5-6 Months
concurrently)

FINANCIALS
PROJECTED BALANCE SHEET

PARTICULARS I II III IV V

SOURCES OF FUND
Capital Account
Opening Balance - 5.33 8.42 12.11 16.37
Add: Additions 2.87 - - - -
Add: Net Profit 7.46 8.59 10.20 13.26 14.91
Less: Drawings 5.00 5.50 6.50 9.00 10.00
Closing Balance 5.33 8.42 12.11 16.37 21.28
CC Limit 6.00 6.00 6.00 6.00 6.00
Term Loan 17.60 13.20 8.80 4.40 -
Sundry Creditors 3.42 4.04 4.60 5.17 5.77

TOTAL : 32.35 31.66 31.51 31.94 33.05

APPLICATION OF FUND

Fixed Assets ( Gross) 22.00 22.00 22.00 22.00 22.00

Gross Dep. 3.23 5.97 8.32 10.31 12.02
Net Fixed Assets 18.78 16.03 13.68 11.69 9.98

Current Assets
Sundry Debtors 3.37 4.02 4.60 5.20 5.83
Stock in Hand 6.71 7.86 8.96 10.10 11.29
Cash and Bank 3.48 3.75 4.27 4.95 5.94

32.35 31.66 31.51 31.94 33.05

TOTAL :

- - - - -
PROJECTED PROFITABILITY STATEMENT

PARTICULARS I II III IV V

A) SALES
Gross Sale 112.40 134.16 153.39 173.47 194.40

Total (A) 112.40 134.16 153.39 173.47 194.40

B) COST OF SALES

Raw Material Consumed 68.40 80.80 91.91 103.46 115.43

Elecricity Expenses 5.59 6.28 6.98 7.68 8.38
Repair & Maintenance 4.50 4.70 5.37 6.07 6.80
Labour & Wages 12.85 13.49 14.17 14.88 15.55
Depreciation 3.23 2.75 2.34 2.00 1.70

Cost of Production 94.56 108.02 120.78 134.08 147.86

Add: Opening Stock /WIP - 3.29 3.82 4.36 4.93

Less: Closing Stock /WIP 3.29 3.82 4.36 4.93 5.52

Cost of Sales (B) 91.27 107.50 120.23 133.51 147.27

C) GROSS PROFIT (A-B) 21.14 26.66 33.16 39.95 47.13

18.81% 19.87% 21.62% 23.03% 24.25%
D) Bank Interest (Term Loan ) 2.15 1.75 1.27 0.79 0.30
ii) Interest On Working Capital 0.66 0.66 0.66 0.66 0.66
E) Salary to Staff 7.31 8.77 10.52 12.63 15.15
F) Selling & Adm Expenses Exp. 2.25 4.02 6.14 6.94 9.72

TOTAL (D+E) 12.36 15.21 18.59 21.01 25.84

H) NET PROFIT 8.78 11.45 14.57 18.94 21.30

I) Taxation 1.32 2.86 4.37 5.68 6.39

J) PROFIT (After Tax) 7.46 8.59 10.20 13.26 14.91

PROJECTED CASH FLOW STATEMENT

PARTICULARS I II III IV V

SOURCES OF FUND

Own Contribution 2.87 -

Reserve & Surplus 8.78 11.45 14.57 18.94 21.30
Depriciation & Exp. W/off 3.23 2.75 2.34 2.00 1.70
Increase In Cash Credit 6.00
Increase In Term Loan 19.80 - - - -
Increase in Creditors 3.42 0.62 0.56 0.58 0.60

TOTAL : 44.09 14.82 17.46 21.51 23.60

APPLICATION OF FUND

Increase in Fixed Assets 22.00 - - - -

Increase in Stock 6.71 1.14 1.10 1.15 1.19
Increase in Debtors 3.37 0.65 0.58 0.60 0.63
Repayment of Term Loan 2.20 4.40 4.40 4.40 4.40
Taxation 1.32 2.86 4.37 5.68 6.39
Drawings 5.00 5.50 6.50 9.00 10.00
TOTAL : 40.60 14.56 16.95 20.83 22.61

Opening Cash & Bank Balance - 3.48 3.75 4.27 4.95

Add : Surplus 3.48 0.27 0.52 0.68 0.99

Closing Cash & Bank Balance 3.48 3.75 4.27 4.95 5.94
COMPUTATION OF PRODUCTION OF COTTON FROM FABRIC WASTE

Item to be Manufactured Cotton from fabric waste

Manufacturing Capacity per day 3000 Kg
No. of Working Hour 8
No. of Shifts per day 2
Total number of working hours 16
No of Working Days per month 25
No. of Working Day per annum 300
Total Production per Annum 9,00,000 Kg
Watage 5%

Total Production per Annum(After Wastage) 8,55,000 Kg

COTTON FROM
Year Capacity FABRIC WASTE
Utilisation

I 40% 3,42,000.00
II 45% 3,84,750.00
III 50% 4,27,500.00
IV 55% 4,70,250.00
V 60% 5,13,000.00

Raw Material Cost (Fabric Waste) Capacity Rate per Kg Amount (Rs.)

Utilisation

I 40% 20.00 68.40

II 45% 21.00 80.80
III 50% 21.50 91.91
IV 55% 22.00 103.46
V 60% 22.50 115.43
COMPUTATION OF SALE
Particulars I II III IV V

Op Stock - 11,400.00 12,825.00 14,250.00 15,675.00

Production 3,42,000.00 3,84,750.00 4,27,500.00 4,70,250.00 5,13,000.00

3,42,000.00 3,96,150.00 4,40,325.00 4,84,500.00 5,28,675.00

Less : Closing Stock(10 Days) 11,400.00 12,825.00 14,250.00 15,675.00 17,100.00

Net Sale 3,30,600.00 3,83,325.00 4,26,075.00 4,68,825.00 5,11,575.00

Sale Price per Kg 34.00 35.00 36.00 37.00 38.00

Sale (in Lacs) 112.40 134.16 153.39 173.47 194.40

COMPUTATION OF CLOSING STOCK & WORKING CAPITAL

PARTICULARS I II III IV V

Finished Goods
(10 Days requirement) 3.29 3.82 4.36 4.93 5.52
Raw Material
(15 Days requirement) 3.42 4.04 4.60 5.17 5.77

Closing Stock 6.71 7.86 8.96 10.10 11.29

COMPUTATION OF WORKING CAPITAL REQUIREMENT

Particulars Amount Margin(10%) Net

Amount
Stock in Hand 6.71
Less:
Sundry Creditors 3.42
Paid Stock 3.29 0.33 2.97

Sundry Debtors 3.37 0.34 3.03

Working Capital Requirement 6.00

Margin 0.67

MPBF 6.00
Working Capital Demand 6.00
BREAK UP OF LABOUR

Particulars Wages No of Total

Per Month Employees Salary
Supervisor 20,000.00 1 20,000.00
Machine Operator 16,000.00 2 32,000.00
Unskilled Worker 12,000.00 2 24,000.00
Helper 10,000.00 2 20,000.00
Security Guard 6,000.00 1 6,000.00

1,02,000.00
Add: 5% Fringe Benefit 5,100.00
Total Labour Cost Per Month 1,07,100.00
Total Labour Cost for the year ( In Rs. Lakhs) 8 12.85

BREAK UP OF SALARY

Particulars Salary No of Total

Per Month Employees Salary
Manager 22,000.00 1 22,000.00
Accountant cum store keeper 20,000.00 1 20,000.00
Sales 16,000.00 1 16,000.00
Total Salary Per Month 58,000.00

Add: 5% Fringe Benefit 2,900.00

Total Salary for the month 60,900.00

Total Salary for the year ( In Rs. Lakhs) 3 7.31

COMPUTATION OF DEPRECIATION

Plant &
Description Land Machinery Furniture TOTAL

Rate of Depreciation 15.00% 10.00%

Opening Balance Leased - - -
Addition - 20.50 1.50 22.00
- 20.50 1.50 22.00
- -
TOTAL 20.50 1.50 22.00
Less : Depreciation - 3.08 0.15 3.23
WDV at end of Ist year - 17.43 1.35 18.78
Additions During The Year - - - -
- 17.43 1.35 18.78
Less : Depreciation - 2.61 0.14 2.75

WDV at end of IInd Year - 14.81 1.22 16.03

Additions During The Year - - - -
- 14.81 1.22 16.03
Less : Depreciation - 2.22 0.12 2.34
WDV at end of IIIrd year - 12.59 1.09 13.68
Additions During The Year - - - -
- 12.59 1.09 13.68
Less : Depreciation - 1.89 0.11 2.00
WDV at end of IV year - 10.70 0.98 11.69
Additions During The Year - - - -
- 10.70 0.98 11.69
Less : Depreciation - 1.61 0.10 1.70
WDV at end of Vth year - 9.10 0.89 9.98
 REPAYMENT SCHEDULE OF TERM LOAN 11.0%

Year Particulars Amount Addition Total Interest Repayment Cl Balance

I Opening Balance
Ist Quarter - 19.80 19.80 0.54 - 19.80
Iind Quarter 19.80 - 19.80 0.54 - 19.80
IIIrd Quarter 19.80 - 19.80 0.54 1.10 18.70
Ivth Quarter 18.70 - 18.70 0.51 1.10 17.60
2.15 2.20
II Opening Balance
Ist Quarter 17.60 - 17.60 0.48 1.10 16.50
Iind Quarter 16.50 - 16.50 0.45 1.10 15.40
IIIrd Quarter 15.40 - 15.40 0.42 1.10 14.30
Ivth Quarter 14.30 14.30 0.39 1.10 13.20
1.75 4.40
III Opening Balance
Ist Quarter 13.20 - 13.20 0.36 1.10 12.10

Iind Quarter 12.10 - 12.10 0.33 1.10 11.00

IIIrd Quarter 11.00 - 11.00 0.30 1.10 9.90
Ivth Quarter 9.90 9.90 0.27 1.10 8.80
1.27 4.40
IV Opening Balance
Ist Quarter 8.80 - 8.80 0.24 1.10 7.70
Iind Quarter 7.70 - 7.70 0.21 1.10 6.60
IIIrd Quarter 6.60 - 6.60 0.18 1.10 5.50
Ivth Quarter 5.50 5.50 0.15 1.10 4.40
0.79 4.40
V Opening Balance
Ist Quarter 4.40 - 4.40 0.12 1.10 3.30
Iind Quarter 3.30 - 3.30 0.09 1.10 2.20
IIIrd Quarter 2.20 - 2.20 0.06 1.10 1.10

Ivth Quarter 1.10 1.10 0.03 1.10 -

0.30 4.40

Door to Door Period 60 Months

Moratorium Period 6 Months
Repayment Period 54 Months
CALCULATION OF D.S.C.R

PARTICULARS I II III IV V

CASH ACCRUALS 10.68 11.34 12.54 15.25 16.61

Interest on Term Loan 2.15 1.75 1.27 0.79 0.30

Total 12.83 13.09 13.81 16.04 16.91

REPAYMENT
Repayment of Term Loan 2.20 4.40 4.40 4.40 4.40
Interest on Term Loan 2.15 1.75 1.27 0.79 0.30

Total 4.35 6.15 5.67 5.19 4.70

DEBT SERVICE COVERAGE RATIO 2.95 2.13 2.44 3.09 3.60

AVERAGE D.S.C.R. 2.79

COMPUTATION OF ELECTRICITY
(A) POWER CONNECTION

Total Working Hour per day Hours 8

Electric Load Required HP 100
Load Factor 0.7460
Electricity Charges per unit 7.50
Total Working Days 300
Electricity Charges 13,42,800.00

Add : Minimim Charges (@ 10%)

(B) DG set
No. of Working Days 300 days
No of Working Hours 0.3 Hour per day
Total no of Hour 90
Diesel Consumption per Hour 8
Total Consumption of Diesel 720
Cost of Diesel 65.00 Rs. /Ltr
Total cost of Diesel 0.47

Add : Lube Cost @15% 0.07

Total 0.54

Total cost of Power & Fuel at 100% 13.97

Year Capacity Amount

(in Lacs)

I 40% 5.59
II 45% 6.28
III 50% 6.98
IV 55% 7.68
V 60% 8.38
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