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Preliminary Project Report
On
PLASTIC RECYCLING
Submitted by:Amogh (66)
Abhijeet (61)
Ravikiran (98)
Sharat kumar (102)
Santosh .S (101)
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Preliminary Project Report
1. General information
Name of entrepreneur: M.N.Rao
Date of birth : 1/4/1978Project : plastic recycling manufacturing unit
Location : Hubli
Address : Rayapur, Hubli
Type of organization : sole trading concern.
1.1Educational qualification
Qualification Institution Year of passing
SSLC Sharadamba school 1994
PUC S.G college 1996
B.E. S.J.M college 2000
M.B.A J.B college 2002
1.2 Work Experience
Organization Position Nature of work Duration
Cruze Plastics Production Manager 3 years
1.3Annual income
Cash in hand 4,00,000
1.4 Details of proposed project
Manufacturing unit
2. Machinery and Equipments
Sl no Particulars Quantity Rate Amount1 PET bottle recycling
production line*
1 11,25,000 11,25000
TOTAL 1,25,000
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* the production line includes a crushing machine, a heater, a friction washing
machine and a two poaching washing machine as the main processing machines. All
the machines are connected through a set of conveyor belts.
2.1Miscellaneous fixed assetsSl no Particulars
Amount
1 Furniture 15,000
2 Others 5,000
TOTAL 20,000
2.2 Preliminary expenses
Sl no Particulars Amount1 Registration 5000
TOTAL 5000
2.3 Production programme
No of working days 300daysNo of working hours 8 hours / daysInstalled capacity 72,000 tons/ yr
Utilized capacity 45,000 tons / yr
2.4 Manufacturing process
Our sources include the city municipal corporation, local waste vendors and self help
groups and citizens. We buy the raw materials at 14 rupees per kg from all the sources,
the raw material being plastic bottles of all shapes and sizes and colors. These bottles arefirs sorted according to their nature and cellular structure to be processed with similar
settings.
Sorting
Post-consumer PET is often sorted into different color fractions: transparent or uncoloredPET, blue and green colored PET, and the remainder into a mixed colors fraction. Theemergence of new colors (such as amber for plastic beer bottles) further complicates the
sorting process for the recycling industry.
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Further treatment
The Further treatment process includes, crushing, heating stirring, friction washing and
two poaching washing. We further treat the post-consumer PET by shredding the material
into small fragments. These fragments still contain residues of the original content,
shredded paper labels and plastic caps. These are removed by different processes,resulting in pure PET fragments, or "PET flakes". After thorough washing these PET
flakes are made ready for sale. PET flakes are used as the raw material for a range of
products that would otherwise be made of polyester. Examples include polyester fibres (abase material for the production of clothing, pillows, carpets, etc.), polyester sheets,
strapping, or back into PET bottles etc.
Expenses 3. Raw materials
Sl no Particulars Quantity Rate Amount1 Plastic bottles 45,000 tons 14 6,30,000
TOTAL 6,30,000
3.2 utilities
Sl no Particulars Amount
1 Electricity 2,40,000
TOTAL 2,40,000
3.3 Man power
Sl
no
Particulars Members Salary / months Amount
1 Supervisor 1 4,000 48,000
2 Skilled 2 3,000 1,08,000
3 Un-skilled 3 2,500 60,000
TOTAL 2,16,000
3.4 Repairs and maintenances
Sl no Particulars Amount
1 Repairs expenses 40,000
TOTAL 40,000
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3.5 administration expenses
Sl no Particulars Amount
1 Rent (8,000*12) 96,000
2 Misc 10,000
TOTAL 106,000
Market potential
As per market survey demand for plastics in the Hubli is 2,00,000 tonsSupply from local suppliers is 1,20,000
And unmet demand is 80,000 so project is feasible.
4. Working Capital
Sl no Particulars Amount
1 Raw materials (630000/12) 52500
2 Salary and wages(216000/12) 18,000
3 Utility(240000/12) 200004 Administration(106000/12) 8833
5 Repairs and maintenances(40000/12) 3333
6 Rent 8000
TOTAL 110666
4.1 Total cost
Sl no Particulars Amount
s1 Fixed cost 11,25,000
2 Working capital 110666
3 Preliminary expenses 5,000
TOTAL 1240666
4.2 Means of finance
Sl no Particulars Amount
1 Proprietors fund (1240666*30%) 372200
2 Term loan (1240666*70%) 868466
TOTAL 1240666
4.3 interest calculation
Year o/s amount Interest Principle amt Installment
1 868466 43423 173693 217116
2 694773 34739 173693 208432
3 521080 26054 173693 199747
4 347387 17369 173693 191062
5 173693 8685 173693 182378
TOTAL 130270 868465 998735
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4.4 Depreciation
Sl no Particulars Amount
1 Machinery (1125000*10%) 1125002 Furniture (15000*5%) 750
TOTAL 113250
5 .Sales revenue
Year Quantity Rate Amount
1 45000 33 1485000
2 50000 33 1650000
3 55000 33 1815000
4 60000 33 1980000
5 65000 33 2145000
PROFITABILITY ANALYSIS YR 1
Sl no Particulars Amount Amount
1 Sales revenue 45,000*33 14,85,000
2 Less costsA Raw materials 6,30,000
B Utility 2,40,000
C Man power 2,16,000
D Administration 1,06,000
E Repairs and main 40,000
F Interest 43,423
G Depreciation 1,13,250
H Rent 96,000
I Principle amt 1,73,693 1658366
PROFIT (-)173366
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PROFITABILITY ANALYSIS YR 2
Sl no Particulars Amount Amount
1 Sales revenue 50,000*33 16,50,000
2 Less costs
A Raw materials 6,30,000
B Utility 2,40,000
C Man power 2,16,000
D Administration 1,06,000
E Repairs and main 40,000
F Interest 34739
G Depreciation 1,13,250H Rent 96,000
I Principle amt 1,73,693 1649682
PROFIT 318
PROFITABILITY ANALYSIS YR 3
Sl no Particulars Amount Amount
1 Sales revenue 55,000*33 18,15,000
2 Less costs
A Raw materials 6,30,000B Utility 2,40,000
C Man power 2,16,000
D Administration 1,06,000
E Repairs and main 40000
F Interest 26054
G Depreciation 1,13,250
H Rent 96,000
I Principle amt 1,73,693 1640997
PROFIT +174003
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PROFITABILITY ANALYSIS Yr 4
Sl no Particulars Amount Amount
1 Sales revenue 60,000*33 19,80,000
2 Less costs
A Raw materials 6,30,000
B Utility 2,40,000
C Man power 2,16,000
D Administration 1,06,000E Repairs and main 40000
F Interest 17369
G Depreciation 1,13,250
H Rent 96,000
I Principle amt 1,73,693 1632312
PROFIT +347688
PROFITABILITY ANALYSIS Yr 5
Sl no Particulars Amount Amount
1 Sales revenue 65,000*33 21,45,000
2 Less costs
A Raw materials 6,30,000
B Utility 2,40,000
C Man power 2,16,000
D Administration 1,06,000
E Repairs and main 40000F Interest 8685
G Depreciation 1,13,250
H Rent 96,000
I Principle amt 1,73,693 1623628
PROFIT +521372
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1st yr
FIXED COST Amount VARIABLE COST Amount
Manpower 2,16,000 RM 6,30,000Adm exp 1,06,000 Utilities 2,40,000
Principal 1,73,693
Depreciation 1,13,250
Rent 96,000
Interest 43423
Repair and
maintenance
40000
TOTAL 788366 8,70,000
2nd yr
FIXED COST Amount VARIABLE COST AmountManpower 2,16,000 RM 6,30,000
Adm exp 1,06,000 Utilities 2,40,000
Principal 1,73,693
Depreciation 1,13,250
Rent 96,000
Interest 34739
Repair andmaintenance
40000
TOTAL 779682 8,70,000
3rd yrFIXED COST Amount VARIABLE COST Amount
Manpower 2,16,000 RM 6,30,000
Adm exp 1,06,000 Utilities 2,40,000
Principal 1,73,693
Depreciation 1,13,250
Rent 96,000
Interest 26054
Repair andmaintenance
40000
TOTAL 770997 8,70,000
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4th yr
FIXED COST Amount VARIABLE COST Amount
Manpower 2,16,000 RM 6,30,000Adm exp 1,06,000 Utilities 2,40,000
Principal 1,73,693
Depreciation 1,13,250
Rent 96,000
Interest 17369
Repair and
maintenance
40000
TOTAL 762312 8,70,000
5th yrFIXED COST Amount VARIABLE COST Amount
Manpower 2,16,000 RM 6,30,000
Adm exp 1,06,000 Utilities 2,40,000
Principal 1,73,693
Depreciation 1,13,250
Rent 96,000
Interest 8685
Repair and
maintenance
40000
TOTAL 753628 8,70,000
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BEP (value) = fixed cost/ P/V ratio
=1.234
P/V ratio = (sales- variable cost) /sales
= ()/9,05,000
= 0.3
BEP(value) = 2,60,936/0.3
= 8,69,787
Feasibility
9,05,000 sales in 12 months8,69,787 in ?
=8,69,787*12/9,05,000
= 11.53 months
i.e Within 1year