HDPE BOTTLES AND CONTAINERS

KSIDC

PROJECT PROFILE ON HDPE BOTTLES AND CONTAINERS

Prepared by:

Kerala State Industrial Development Corporation

September 2012

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HDPE BOTTLES AND CONTAINERS

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HDPE BOTTLES AND CONTAINERS

PROJECT SUMMARY 1. Project : To set up an unit for the manufacture of HDPE bottles/ containers 2. 3. Proposed Location Proposed Capacity : : 2 Litre Bottles/Container 5 Litre Can 10 Litre Can Caps 4. 5. 6. 7. 8. 9. Project Cost Sales Turnover (2 shift) Major Raw Materials Land Requirement Man Power PBT (at optimum capacity) : : : : : : Rs.450 lakhs Rs.700 lakhs (optimum capacity utilization) HDPE resin granules 580 MT/annum 200 cents 40 Nos. Rs.80 lakhs 960000 pieces 345600 pieces 36TPA KSIDCs Industrial Growth Centre, Valiya Velicham, Kuthuparamba, Kannur District 1344000 pieces

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HDPE BOTTLES AND CONTAINERS I. INTRODUCTION HIGH-DENSITY POLYETHYLENE (HDPE) resin is produced from the chemical compound VIZ., ethylene. HDPE can be blow moulded into containers of different sizes and shapes. Some of the common items that are produced include bottles and containers of different size. The light weight, flexibility, corrosion and chemical resistance have made these plastic products versatile for storage and handling of water, petroleum products etc. HDPE Bottles are used for detergents, shampoos, motor oil, milk, drugs and cosmetic products. Milk bottles are the single biggest HDPE packaging material. Most milk and water bottles use a natural colored HDPE resin. Bottles used for detergents, shampoos and other products often have colorants added to the resin. HDPE resin also can be used to make bottle and container caps, and flexible packaging such as sacks and trash bags. HDPE bottles and containers have been displacing heavier metal, glass etc.

II. PROJECT/PROCESS The project envisages setting up a unit for the manufacture of HDPE bottles/ containers. HDPE Bottles and containers are manufactured in an automatic extrusion blow moulding machine. HDPE granules are fed in to an automatic extrusion blow moulding machine and is subjected to heat and pressure in an extruder. The semi-molten plastic in extruder is passed through the nozzle and air is blown into the mould to force the molten plastic against the sides of the mould. The final product is then cooled before removal from the mould. The suggested product mix is given below. Product mix 2 Ltr Bottles 5 Ltr Can 10 Ltr Can Production Quantity 1344000 pieces 960000 pieces 345600 pieces
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KSIDC

Caps

36TPA

The production basis for a typical unit would be as under: Working hours/day: 16 (2 shifts) Working days in a year: 300

III.

MARKET POTENTIAL

Since the early seventies, high-density polyethylene (HDPE) has been the polymer of choice for the production of bottles. These bottles are cornering the market for packaging liquids such as detergents, cosmetics, lubricants and dairy products, a market whose scope has opened up a multitude of potential applications for HDPE. In this market that was far from maturity level, growth could be realized in virtually every segment of application. At present, cartons, pouches and bottles made of HDPE, polypropylene, PET and polycarbonate compete for space on retailers shelves. Glass bottles have lost market share and are now holding their own in just a few traditional segments. The features which make HDPE the first choice are the following: Highly cost-effective material Excellent fitness for use Wide-ranging design potential and processing flexibility,

Thus, industry has recognized HDPE as the plastic container of choice to ensure purity of its contents. Plastic milk containers are made of High Density Polyethylene. Opaque vitamin and medicinal products are contained in HDPE containers. Laundry detergent bottles and fuel tanks in automotive vehicles are also made of HDPE.

IV.

RAW MATERIAL & UTILITIES REQUIREMENT

The main raw materials required are HDPE granules. The annual requirement at 100% capacity utilization for HDPE is estimated at 580 tonnes per annum (considering wastage of 5% ).

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The utilities required are power and water. Around 200 KW of Power and 20KL of water are required per day.

V.

LOCATION, LAND & BUILT-UP AREA REQUIREMENT

The location suggested is at KSIDCS Industrial Growth Centre (IGC) at Valiya Velicham, Kuthuparamba, Kannur District. The IGC, Kannur is spread over 250 acres of land, which has all the basic infrastructure facilities and excellent road connectivity. The total land required is about 2 acres and the built-up area requirement is estimated at 1200 sq.m. VI. MANPOWER REQUIREMENT

The total manpower requirement is 40 nos out of which administrative is 10 and factory staff is 30. VII. PROJECT COST & MEANS OF FINANCE

The Total Project Cost is Rs. 450 Lakhs as per the table below: Description Land ( Long term lease 90 years) 2 acres Land Development Building and Civil Works Plant and Machinery Electrification Misc fixed assets Prelim - Preoperative Expenses Contingencies Working capital margin Rs. Lakhs 46.00 10.00 50.00 181.00 30.00 15.00 30.00 18.00 70.00 450.00

1 2 3 4 5 6 7 8 9

This project cost may be financed at a Debt-Equity ratio of 1.5:1 as follows: Means of Finance Equity Term Loan Total Rs. in Lakhs 180.00 270.00 450.00

VIII.

PLANT & MACHINERY

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The equipment has been selected keeping in view the capacity and other process considerations. The major equipment required by the unit for HDPE bottles are as follows Description 1. Blow Moulding Machine 2. Blow Moulding Machine 3. Blow Moulding Machine 4. Injection Moulding Machine 5. Blow Moulds 6. Blow Moulds ( 2 nos) 7. Blow Moulds ( 2 nos) 8. Injection Mould caps 9. Injection Mould Inner 10. Injection Mould Ring 11. Printing Machine 12. Grinding Machine 13. Materials Hopper Loader 14. Materials Mixer 15. Conveyor Belts 16. Delivery Vehicle (Ace) 17. Forklift 18. Trolley 19. Tool Room 20. Water Chiller 21. Air Compressor Qty 10 Litre 5 litre 2 litre 10 Litre 5 litre 2 litre 10 Litre Caps 5 Litre Caps 2 Litre Caps 1 4 4 4 4 1 1 1 1 1 1 Rs. Lakhs 33.75 24.75 18.00 18.00 5.40 6.75 4.50 4.50 3.60 2.02 13.50 9.00 0.90 2.70 1.58 1.55 9.00 1.50 3.00 2.00 15.00 181.00

The following table gives the names and addresses of plant and machinery suppliers in india. The above machinerys can be also sourced from China, Taiwan Germany etc. Sl. No. 1 2 3 4 5
IX.

Name Suresh Engineering Works Indore- (M.P.) R. H. Windsor (India) Ltd, Thane British Plastic & Engineering Works New Delhi Oswal Engineering Corpn. Mumbai Kwality Engineering Works Kolkata
REVENUE

Size of Product

Price Per Kg 130 120

Quantity/ Total Sales KG Rs. 161280 216000 20966400 25920000

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2 Ltr Bottles 5 Ltr Can

HDPE BOTTLES AND CONTAINERS 10 Ltr Can Caps 120 160 138240 36000 16588800 5760000 69235200

KSIDC

X.

FINANCIAL INDICATORS

The Average Break Even Point for the project is 45%. The IRR for the project is 20%, Average DSCR is 3.14. Payback period is 4 years

XI.

CONCLUSION AND RECOMMENDATION

HDPE containers and bottles play a significant role in the packaging industry. Their light weight, flexibility, corrosion & chemical resistance have made these plastic products more popular for storage of almost all kinds of liquid products. The project is prima facie technically feasible and financially viable and found to be suitable for further development.

For further details please contact Kerala State Industrial Development Corporation Ltd.

Disclaimer:
The findings contained in this Project Profile are based on the initial information collated through primary and secondary research, which is indicative in nature. Reference herein to any specific commercial product, process, service by trade name, trademark, manufacturer, or otherwise, does not constitute or imply its endorsement, recommendation, or favoring by KSIDC or any entities thereof.

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