Академический Документы
Профессиональный Документы
Культура Документы
2013
We conducted a research on the bottle manufacturing process and via this research we have been able to
envision ourselves with ideas regarding the scope and challenges of business opportunities in Nepal. We
believe that it will really help us get our dreams come true in the near future.
Through this project we have gained a lot of experience in finding out more about the subject matter and
the entrepreneurship concepts as well as the financial and business concepts. Moreover we have gained
the knowledge of the process and how this subject actually helps is to be and entrepreneur. After the
project, we realize that setting up a new business requires a lot of thought and hard work.
Last but not the least, we would also like to thank all the friends who were always supporting and there
when needed.
Thank you.
Arpana Pradhan
Jashmina Pradhananaga
Signature Page
I hereby certify that I have read this document and, in my opinion it is satisfactory in scope and
quality as a business plan project held during third year sixth semester for the under graduate
course of Entrepreneurship and New Business Foundations held at Kathmandu College of
Management.
Date: __________________________
Remarks:
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All rights of this report are reserved. No part of it may be reproduced or transmitted in any form
without the prior notice and permission by the authors. No patent liability is assumed with
respect to the use of the information content there in.
Authors:
Arpana Pradhan
Ayush Man Tamrakar
Jashmina Pradhananaga
Disclaimer
The objective of this report was to gain insight in the field of making business plan and
analyzing the financial situation and feasibility of a bottle manufacturing company in Nepal.
The authors are confident that the results of the analysis and the results presented in this report
will be taken as guidance for a comprehensive study at the future date. The authors are not
responsible or liable legally and morally against the results and consequent decisions based on
the responses received from the analysis. The views expressed in this report are those of the
group members only.
Table of Contents
Executive Summary
1.3 Products
4.0Marketing Plan
4.1Overall Marketing Strategy
4.3Marketing Expense
7.1Management Team
7.2Company Structure
7.5Administrative Office
8.2.1.1Fixed Capital
8.2.1.2Working Capital
8.2.1.3Preoperating Expenses
8.2.1.4 Others
8.4Selling Price
8.5Income Statement
8.8Return on Investment
Executive Summary
Plastic is the b as ic need of our d ay to day life. During recent years
the p lastic industry has grown with a substantial growth rate. This growth is
driven by 3 sectors viz. p ackaging, infrastructure and agric ulture. PET
bottles have beco me highly popular p ackaging for many kinds o f liquid
products such as soft drinks, drinking water, cooking oil because
o f it s s t r e n g t h , lig h t w e ig h t , a n d s a t is f a c to r y resistance to acids and
almost all organic solvents.
We, the Care plastics provide a wide range of plastic bottles solutions for
household and raw material for packaging of various companies. Care Plastics
Company is planning to start its way with a view to manufacture plastic bottles in
Nepal. Our main focus is our industrial customer whom we will sell PET bottles and PET flakes.
It will co ntrib ute more than 90% of o ur sales. We will also support on
the ho useho ld p lastic bus iness which is the part of o ur portfo lio. T he
pre operating cost will be Rs 131000.
Since plastic material does not carry any brand name so it will give us an additional benefit in long
term to establish our brand name. To exploit the market we
willu s e p e n e t r a t io n p r ic in g a s o u r m a r k e t in g s t r a t e g y a n d u t i l
iz e o u r s t r in g e n t distribution network and strong industrial relationship.
The company will provide a wide range of plastic bottles for both producers and consumers. The products
for consumers can be suitable for household water refilling purposes and portable water carriage
purposes. However, our potential customers are business producers who will be producing soft drinks and
juice. The market will be favorable for us as the prices have been set at a reasonable level. The company
after a stable start off will apply a sustainable green approach and use recycled materials.
The company has its production set up in Dhulikhel where a positive advantage will exist as the sector
has sufficient manpower and resources and it has a direct link with transportation and communication.
The administrative decisions will be centralized from the capital of the country, Kathmandu. The office
will be set up in Bagbazar. This location is best favorable with the potential market and will benefit at its
best.
Product no.:902
Product Code: KLRH
Product Name: PET Blue
Company Share:
1/3 ownership of Arpana Pradhan
1/3 ownership of Ayush Man Tamrakar
1/3 ownership of JashminaPradhananga
Compounders
These specialist companies, usually small, stock various polymers and provide the
manufacturers of plastic goods with technical advice and the most suitable materials or
mixtures for each individual need.
Stockists
These warehouses stock polymers and com pounds but neither m anufact ure
t he m s e l ve s , no r pr o vi de a c o m po u n di n g s e r vi c e . The y m a y be age nt s
o r subsidiaries of the producer companies or departments of companies concerned with the supply
of other materials such as chemical, rubber or paper. They may be willing to stock
reclaim alongside virgin materials, especially if these are in short supply.
Other Manufacturers
Many companies are not plastics specialists but employ molding operations in the
manufacture of some other product. For example shoe and boot makers use plastics
extensively and may carry out the various plastics molding operations in the same
production sequence as the work in leather, canvas, rubber etc.
Manym anufact urers use pl astic pac kagi ng m achi nery at t he end of a pro duction
operation.
Fabricators
These firms cut and join sheet, rod or extrusion to m anuf acture a variety
of products. They have no opportunity to use reclaim. Machinery and Tool Makers one
other sector of the plastics industry justifies mention although not customers for reclaim. The makers and
suppliers of plastics manufacturing machinery, tools, moulds and dies are well informed about
who does what, who makes what and who uses what within the local plastics industry. They may
advise who is likely to buy material
Our long term strategy will base on timely completion of the establishment of the
business centre with low execution cost. Our strategy will focus not only the current
uninterrupted production of PVC and PET bottles and acquisition of customer as fast as we can, but
we will also look for the future expansion plan and execution strategy. Our future
development strategy will focus on to chart out a careful plan for the fut ure expansion
and growth of our business. The deve lopment strategy will address following issue:
•How will we expand our services?
•Which are the new areas we will include to provide our services?
•What will be the format of the business?
Our development strategy will address all those above mentioned point. As we will grow
and our earning will increase, we will produce more of PVC and P ET bottles as well
as expand i n ne w area. We have a de velopment strategy to expand our facility size in
order to meet the production size
The Company has chosen its target markets because PET is in high demand as flake
resin by converters, as roll stock sheet used to produce high visibility packaging and as
high strength strapping for the lumber industry. Sales are price-sensitive, so that
proximity to markets and feed stock source provide a competitive edge.
Si nc e we ar e ne w pl a ye r i n t he m ar ke t s o w e ne e d t o m ake s o m e
s t r i nge nt strategies to penetrate market and grab customers. The customers of
the plastic bottles industry are scattered due to lack well known brand names. So our first
priority will be to accumulate the defused customers.
The di r e c t c us t o m e r s ar e t he c us t o m e r s w ho m we ar e s e l l i ng o ur pr o d
uc t r e gul ar l y. So f o r us ho us e ho l ds w ho m we ar e s e l l i ng pl as t i c go o ds
an dcom panies who are getting raw materials for packaging are direct custome
rs ( P E T bo t t l e s ) . So o nl y i n K at hm a nd u, in terms of business to business
market around 20small and medium scale companies are our direct customers. Apart from them
there are few small companies which are giving compounding services. They use to
collect various types of plastics flakes along with the virgin plastic and suggest customer
(companies) in choosing appropriate plastic. An Asha enterprise is one compounder whom we
will sell our plastics.
Demand can be defined as the quantity which consumer is willing to purchase at a given
price during a certain time period. In our case, demand will be determined by the
individual demand of the shops selling plastic bottles. The estimation of the demand of
the bottles is shown as follows:
Market share will help us determine our competitors, total market share of different
competitors and how we plan to make sure that we grab more of the market share in the
future. Our market share will be estimated on the basis of number of competitors. The
industry has only 3 known competitors. Therefore, the market share of our company is:
4.0Marketing Plan
4.1Overall Marketing Strategy
Product/Service Strategy
The packagi ng companies require high quality
and hi ghl y transparent P ET bottles. The companies which are producing
mineral water will reject PET bottles with even a small impurity/ opaqueness.
So we the Care Plastics provide high end PET flakes for the perfect packaging. The
company will appl y recycling and e xtrusion technology m anaged by
decades of industry specific expertise to create a competitive advantage for its
clients. These processes will produce clean, cost-efficient, recycled raw material
for manufacturers of thermoform, laminate and other high value-added products,
and high strength packaging strapping for shippers of large products and pallets,
thereby red ucin g co sts and creatin g a clear pricing
e d g e a m o n g t h e i r competitors.
Plastic bottles are no w in high dem and. And this dem and is driven by
continuously increasing promotional activities.
Pricing strategy
As plastic products do not carry any brand name so only pricing and distribution
strategies will wor k to achie ve com petitive e dge . The pricing
strategy we will use is penetration pricing. The price of the plastic bottles we will sell will
be lower than the market price. Also for the PET flakes and bottles the price will be
lower than the competitors. A lower price enables us to get contracts of PET bottles
and sheets from various companies .
Place strategy
Firstly we will target Kathmandu, Bhaktapur and Lalitpur areas. We
will have a distribution center in K athm andu whic h continuously
maintains the supply of the bottles. PET bottles will be stored in warehouse
which is close to the facility itself. The sales people will directly contact to the
companies which require these bottles for packaging and look for the contracts. In city
as stated above that we will have a distribution center, from that center we will
distribute to whole sellers.
Promotion strategy
Wewillpr o m o t e t hr o ug h o nl i ne s o c i al m e di a a n d we wi l l al s o de
ve l o p o ur w e bs i t e which enables us to widely spread our contact among various
companies. The site will have full details of product which are available for
companies as well as end user.
Step 1:
We should obtain PET from a reliable supplier. PET is manufactured by polymerizing, or
reacting, the chemicals terephthalic acid and ethylene glycol so as to produce pellets of a
raw material called polyethylene terephthalate, which is abbreviated to PET. However,
because PET is not biodegradable, it is possible to obtain raw PET for
bottlemanufacturing from shredded recycled plastic bottles.
Step 2:
Secondly, we should mold the raw PET pellets or recycled shredded PET into a preform,
which resembles a test tube in appearance.This is done using either a separate preform
molding machine or a combined one-step apparatus that includes the preform and final
molding within one machine. We are using a combined one-step apparatus.
Step 3:
Thirdly, the mold is to be stretched. The preform is placed into a mold that corresponds to
the shape of the bottle and is contained within the injection molding device. In some
cases the original preform tube is cut into shorter lengths before being placed in the
stretch-molding device. Hot, pressurized air is blown through a steel tube that pushes the
heated preform tube against the mold so that crystallization takes place as the heated
preformed PET is forced to take the shape of the inside of the mold.
Step 4:
The bottles are then trimmed as necessary to remove excess PET, and then cooled with
compressed air before they are either filled on-site or shipped to the location where they
will be filled. Hot filling bottles are only possible when they will be used for the sale of
foods of a certain degree of acidity, and this should be done only with proper equipment.
Step 5:
Finally the bottles are labeled as necessary once they are filled. Labels are produced with
separate equipment and are not usually provided by PET bottle manufacturers unless the
manufacturer also fills the bottles. Therefore, we are not labeling the product in the
factory.
We have kept our capacity a bit large than what is required today but it is quite relevant
in context to the increased demand in future since there are few competitors and we
expect that the locally made plastic bottles will be widely used than those imported from
abroad in future. Below is the calculation of future capacity utilization estimation:
Plastic bottles are formed using a variety of techniques. The various raw materials
required for the production of plastic bottle are:
High Density Polyethylene (HDPE) is the most widely used resin for plastic bottles.
This material is economical, impact resistant, and provides a good moisture barrier.
HDPE is compatible with a wide range of products including acids and caustics but is
not compatible with solvents. HDPE is naturally translucent and flexible. The addition
of color will make HDPE opaque altho ugh not glossy. HDPE lends itself readily to
silk screen decoration. While HDPE provides good protection at below freezing
temperatures, it cannot be used with products filled at over 160 °F (71 °C) or products
requiring a hermetic (vacuum) seal.
Polyvinyl Chloride (PVC) is naturally clear, has extremely good resistance to oils,
and has very low oxygen transmission. It provides an excellent barrier to most gases
and its drop impact resistance is also very good. This material is chemically resistant,
but it is vulnerable to solvents. PVC is an excellent choice for salad oil, mineral oil,
and vinegar. It is also commonly used for shampoos and cosmetic products. PVC
exhibits poor resistance to high temperatures and will distort at 160 °F (71 °C),
making it incompatible with hot filled products.
Polypropylene (PP) is used primarily for jars and closures and provides a rigid
package with excellent moisture barrier. One major advantage of polypropylene is its
stability at high temperatures, up to 220 °F (104 °C). Polypropylene is autoclavable
and offers the potential for steam sterilization. The compatibility of PP with high
filling temperatures is responsible for its use with hot fill products. PP has excellent
chemical resistance, but provides poor impact resistance in cold temperatures.
Post Consumer Resin (PCR) is a blend of reclaimed natural HDPE (primarily from
milk and water containers) and virgin resin. The recycled material is cleaned, ground
and recompounded into uniform pellets along with prime virgin material especially
designed to build up environmental stress crack resistance. PCR has no odor but
exhibits a slight yellow tint in its natural state. This tint can be hidden by the addition
of color. PCR is e asily processed and inexpensive. However, it cannot come into
direct contact with food or pharmaceutical products. PCR can be produced in a variety
of recycled content percentages up to 100%.
Since the factory location is Dhulikhel, we plan to employ local laborers and if required,
we will hire few from the valley as well.
The laborers will be given a proper work schedule which is to be followed strictly. One
week training program will be conducted for the laborers. They are required to inform t he
management at least one month in advance before quitting the job.
Strengths
The strengths of this company is that it is relatively stable. Although the demand for
manufacturing bottles tends to fluctuate with the ups and downs of the economy, it is
characterized by regular periods of recovery following any downturns. Moreover,
manufacturing plastic bottles has become highly efficient over the last century, with the
ability to maximize both the productivity of the workers and machines to maximize
profits.
Weaknesses
A weakness of our firm is that much of it is built on the production of non-essential
goods. This means that a severe downturn in the economy can have a crippling effect on
it. Another weakness is that it is a mature industry. There is little room for growth. As a
result, the manufacturing of the plastic bottles industry can be a cash cow for those who
are already in it but may be unattractive to new entrants.
Opportunities
Opportunities in this industry are in the technology and bio-technology areas. These are
growing market segments with higher profit margins. Additionally, they are knowledge-
dependent market segments that require highly specialized workers, which makes it
difficult for low wage countries to compete in this market segment, thereby providing an
edge to more industrialized countries. Foreign markets with a growing middle class are
providing opportunities for technology and bio-technology manufacturers to increase
their profitability through exports.
Threats
The largest threats to this type of firm in developed nations are from low wage countries.
The low wages of these countries have made it impossible for many businesses in
developed nations to compete, requiring them to either close or move overseas to find
cheap labor.
6.3 Intellectual Property
This company will be managed under the partnership venture of Mr. Ayush Man
Tamrakar, Ms. Jashmina Pradhananga and Ms. Arpana Pradhan. These three partners
will be contributing on equal proportions.
Ayush Man Tamrakar, President, has a 20 year history of experience encompassing all
aspects of Polymer Raw material, Plastic Conversion Methods, and Venture
Development. He has founded successful ventures in plastic converting industry, and
assisted in the launch of five plastic converting manufacturing plants.
Arpana Pradhan, CFO, has over 30 years investment and merchant banking and
management experience. She has assisted in raising over $500 million and served as
board member in over 40 public and private companies.
7.2Company Structure
The organization will be managed by Ms. Jashmina Pradhananga, Mr. Ayush Man
Tamrakar and Ms. Arpana Pradhan. Under them there will be different managers who
will be directly reporting to them. Each manager will have their own department and will
be responsible for their work. The organization chart is shown below:
Central Office
Sales and
Production Accounting
Marketing
Department Department
Department
General
Manager
Sales and
Production
Marketing Account Head
Manager
Manager
The following activities need to be done before the business can be operated:
The trail production has to be done to see how good the product comes out and whether
there is any problem with the plan and the machinery or not. Moreover, we have to come
out with the sample product in the market to see the response. All these costs are included
in the pre operating cost. They are as follows:
Description Amount
Registration cost 7000
Trial Production 100000
Market Survey 10000
Transportation cost 5000
Telephone registration 4000
Others 5000
Total 131000
10% amortization 13100
Monthly Amortization 1091.67
Furniture 68500
Furniture
Description Amount
Telephone Bill 2000
Refreshment 30000
Accountant Salary 7000
Others 5000
Depreciation 3244
Amortization 1091.67
Total 48335.67
The total capital requirement refers to the amount of money a business needs for its
normal operations and also the amount of cash and easily liquidated assets that a
broker/dealer or bank needs to meet SEC regulations, usually expressed as a proportion
of total liabilities. In general, the kinds of assets that can make up the broker -dealer
capital requirement are strictly defined.
Working Capital
8.2.1.2Working Capital
1. Working Capital 10,18,574
The pre-operating expense as previously calculated is Rs. 1,31,000. Thus, the total
amount required to start the business is Rs. 1,31,000.
Cash Outflow
Pre-operating expense 1,31,000
Purchase of Fixed Assets 1,81,58,400
Raw Material Cost 31,79,700
Direct Labor Cost 13,80,000
Factory Overhead Expense 15,98,400
Marketing Expense 3,60,000
Administrative expense 5,28,000
Increase in Inventory 3,43,945
Interest expense 18,00,000
Repayment of Loan 24,00,000
Tax 4,13,452.5
Total Cash Outflow 1,82,89,400 1,20,03497.5
Description 1st Year 2nd Year 3rd Year 4th Year 5th Year
Capacity Utilization 75% 80% 85% 90% 100%
Sales Forecast (in units)
Total Administrative
and Marketing
Expenses(Rs)
EBIT(Rs)
Interest expense(Rs)
EBT(Rs)
25% Tax (Rs)
EAT/ Net Profit (Rs)
Accumulated Profit
(Rs)