DISPOSABLE PLASTIC CUP

PRODUCT CODE

: NA

QUALITY AND STANDARDS

: As per customer requirement

PRODUCTION CAPACITY
Value

: 120 MT (Per Annum)

: Rs. 2,01,60,000/-

MONTH AND YEAR

OF PREPARATION

: July, 2014

PREPARED BY

: Sh. Harinder Kumar

Investigator (Mechanical)

1. INTRODUCTION
The disposable plastic cups are manufactured by thermoforming technique.
They are fast replacing conventional cups. Drinking water, Ice-cream and other dairy
products are packed in disposable cups. Besides Ice-cream industry, hotels,
restaurants, canteens etc. have been increasingly using disposable cups as against
conventional glass-wares or ceramic cups. Disposable cups are mainly used for food
items and are made out of polypropylene or polystyrene sheets. Sheets having
thickness 0.35 mm to 2 mm is used for these items in thermoforming machine. The
disposable cups are gaining popularity due to attractive look, light weight for
container, ease of transportation and low impermeability. Now-a-days organizations
like railways, airlines are using disposable cups for serving water, coffee, tea etc.

2. MARKET POTENTIAL
Due to the recent change in the life style of urban class the demand for
disposable cups is increasing at a rapid rate. Apart from being used at home, they
also come in handy during parties, picnics and other functions and get-togethers.
Plastic disposable cups are also used by Ice-cream industry, hotels, restaurants,
canteens etc. but the major customer of disposable cups is ice-cream industry and
they have started using plastic cups instead of paper ones that were being used
earlier. The main advantage of these plastic cups is that they are completely leak
proof. Plastic cups can be made up of different sizes and they can hold bulk material
easily in comparison to the traditional paper cups. Besides organization like
Railways, Airlines are using a good quantity of plastic disposable cups.
Considering the above factors, demand of disposable cups is expected to
increase faster in future.

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Mechanical Division

3. BASIS AND PRESUMPTIONS

i.
ii.

iii.
iv.
v.

The basis for the calculation of the production capacity is calculated on single
lift basis on 75% efficiency.
The rate of interest in the scheme has been taken on the basis of 14% at an
average. How-ever, this figure is likely to vary depending on the financial
outlay of the project as well as location of the unit.
The breakeven point in the scheme has been calculated on the full capacity
utilization basis.
Labour wages-Estimated on the minimum wages.
The Cost of machinery, equipment, raw material and other expenditure
initiated in the profile are based on the prices prevailing at the time of project
preparation. Therefore they are subject to necessary change from time to time
based on local condition and availability.

4. IMPLEMENTATION SCHEDULE
S.No.

Activity

Estimated
period required

1.

Market survey for collection of data in respect of

demand, raw material, machinery and selection of site.

4 Weeks

2.

Preparation of project document and registration and

other clearance.

4 Weeks

3.

Arrangement of finance /loan

4 Weeks

4.

Procurement of machinery & equipment & Installation

6 Weeks

5.

Purchase of raw materials

2 Weeks

6.

Trail Production

2 Weeks
Total

22 Weeks

5. TECHNICAL ASPECTS
5.1. Process of Manufacturing
Polypropylene/Polystyrene sheet feeding reels of preset length is dragged
from bobbin reel in the Thermoforming plant. The conveyor chains carry the sheet
through the heater assembly to the Forming table. The heated sheet is punched to
form the shape of the mould. The cups thus formed are stocked and the punched
waster sheet is wound on scrap sheet winder. To get printed cups, the sheets are
printed before forming into cup. Taking 200ml. cup as yard stick as it is mostly used
for serving drinking water, coffee/tea etc., The installed capacity of the machine
with 16 cavities mould is approximately 1,53,600 cups per shift. In terms of weight, a
200ml cup made of 0.7mm thick High Impact Polystyrene sheet is approximately
2.58 gms. Therefore, the total weight of output per shift is 396 Kg Approx. The
average weight of sheet required per cup is 3.2gms. (Which implies wastage of
approximately 0.62 gms per cup). As the raw material wastage is very high the scrap
needs to be recycled. The scrap can be ground and may be either extruded in sheet
extruder or sale.

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Disposable Plastic Cup

5.2. Production Capacity

120 MT of Disposable Plastic Cups @ Rs. 1,54,000/- per MT
Value: Rs. 1,84,80,000/-

5.3. Quality Control and Standards

The Plastic disposable cups are manufactured as per customer requirement
and specification.

5.4. Motive Power

70 KW

5.5. Pollution Control

The unit does not create any pollution. However, proper ventilation should be
made in the processing area for the better circulation of the fresh air.

5.6. Energy Conservation

Entrepreneurs may select energy efficient machinery and proper planning has
also to be made for saving energy in the unit.

6. FINANCIAL ASPECT
6.1. Fixed Capital
Land & Building: Covered Area of 400 Sq. Meters on rent @ Rs. 42,000/month.
6.1.1. Machinery and Equipments
S.No. Description

Qty.

Amount (Rs.)

1.

Automatic thermoforming machine

Power 40 kw

16,00,000

2.

Scrap grinder 15H.P.

2,00,000

3.

Air compressor 25 H.P.

3,00,000

Sub Total

21,00,000

4.

Installation and electrification @ 10%

2,10,000

5.

Die & Punch for cups

3,00,000

6.

Testing equipment & office furniture etc

80,000

7.

Preoperative expenses

20,000
Total

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27,10,000

Mechanical Division

6.2. Working Capital (per month)

6.2.1. Salary & Wages
S.No.
1.
2.
3.
4.
5.
6.

Designation
Supervisor
Skilled Workers
Semiskilled Workers
Office Clerk cum accountant
Watchman cum-peon
Helper

Nos.
1
1
2
1
1
2

Salary (Rs.)
12,000
10,500
9,500
10,400
9,500
8,600
Total (salaries)
(+) Perquisites @ 15% of salaries
Total
Say

Total (Rs.)
12,000
10,500
19,000
10,400
9,500
17,200
78,600
11,790
90,390
90,400

6.2.2. Raw Material

S.No.
1.

Description
Polystyrene

Qty. (MT)
12

Rate (Rs.)
95,000
Total

Total (Rs.)
11,40,000
11,40,000

6.2.3. Utilities
1.
2.

Power 53 kw/Hr @7 Rs. Per Unit

Rs. 74,200
Water L.S.
Rs. 10,000
Total Rs. 84,200

6.2.4. Other Contingent Expenses

S. No.
1.
2.
3.
4.
5.
6.
7.
8.
9.

Particulars
Rent
Postage and Stationery
Telephone
Consumable stores
Repairs and Maintenance
Insurance
Transportation charges
Advertisement and publicity
Miscellaneous
Total

6.2.5. Total Recurring Expenditure (per month in Rs.)

1.
2.
3.
4.

Raw Material
Staff & Salary
Utility
Other Expenses
Total
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11,40,000
90,400
84,200
57,000
13,71,600

Value (Rs.)
42,000
1,000
1,000
1,000
2,000
3,000
2,000
3,000
2,000
57,000

Disposable Plastic Cup

6.3. Total Capital Investment

Fixed capital

Rs. 27,10,000

Working capital for 3 months

Rs. 41,14,800

Total Rs. 68,24,800

7. FINANCIAL ANALYSIS
7.1. Cost of Production (per annum in Rs.)
1.

Depreciation on machinery @ 10%

2,10,000

2.

Depreciation on Tools, Fixture & Spares @ 20%

60,000

4.

Depreciation on office equipment & furniture @ 20%

16,000

5.

Working Capital

6.

Interest on total capital investment @ 14%

1,64,59,200
9,55,472
Total
Say

1,77,00,672
1,77,00,700

7.2. Turnover (per annum)

S. No. Item
1
Plastic disposable cup
2

Qty.(M.T.)
120

Unit Price (Rs.)

1,54,000

Total (Rs.)
1,84,80,000

16,80,000
2,01,60,000

Sale of recycle scrap

Total

7.3. Net Profit (per annum)

=

Turnover cost of production

Rs. 2,01,60,000 1,77,00,700

7.4. Net Profit Ratio

=

Net profit per year

X 100
Turnover per year

24,59,300
X 100
2,01,60,000

= 12.2 %

7.5. Rate of Return

=

Net profit per year

X 100
Total Capital Investment

24,59,300
X 100
68,24,800

= 36.0 %

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Rs. 24,59,300/-

Mechanical Division

7.6. Break-even Point

S.No.

Fixed Cost (Per Annum)

(Rs.)

Rent

5,04,000

Insurance

Depreciation

2,86,000

Interest on capital investment

9,55,472

40% of Salary and wages

4,33,920

40% of other contingents expenses

(excluding rent& Insurance)

36,000

57,600
Total

22,72,992

Say

22,73,000

B.E.P
=

Fixed Cost
X 100
Fixed Cost + Net Profit

22,73,000
X 100
22,73,000 + 24,59,300

= 48.0 %

Name and Addresses of Machinery & Equipment Suppliers:1. M/s K. L. Thermoformers Pvt. Ltd.C-67/2, Okhla Ind. Area, New Delhi.
2. M/s Sant Engineering Industries, 580, Karol Bagh, New Delhi.
3. M/s Endson Enterprises, 302/23, Vikas Puri, New Delhi.

Raw Material
Raw Material is available locally.

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