RECYCLING OF PET (PET PLAKES)

INTRODUCTION

The recycling plastic is an essential requirement in modern society in view of the

environmental problems faced by the extensive use of plastics bags, cans, and
bottles. The usage of PET bottles have been increasing all over these years and
the demand and the consumption is growing at a faster rate due to globalisation,
liberalisation etc. The disposal of healthy recycling of plastic is the basic
requirement. The used bottles of plastic are re-cycled by crushing, grinding and
again by making them into flakes.

MARKET POTENTIAL

The global PET consumption in packaging was around 4.6 million tonnes in 2000
and is estimated to reach 8.5 million tonnes in 2005. The PET for packaging has
been growing at the rate of 12% to !5 % per annum, PET bottles accounted for
50% of the global soft drinks packaging market in 2000. USA is the largest PET
consumer in the world with current demand at about 2 million tonnes.
The PET market in India is growing. The India’s consumption of the PET bottles
per annum is estimated at about 100000 tonnes The main segments where PET
bottles are used are

- Mineral water
- Carbonated Soft Drinks
- Edible Oil
- Liquor
- Household items
- Other (for Packaging juices, food stuffs etc.)
The quantum jump in the volume of used stretch blow moulded PET bottles in
the country has raised an alarm even in the plastic industry. After owning up
responsibility for generating huge volumes of such non-biodegradable waste
materials, the industry has now initiated moves to evolve cheap technology for
recycling the litter of such PET bottles.
Very less effort has been made to create awareness and a systematic network
for disposal and collection of used PET bottles.
Similar is the case with many other plastics being used & disposed off. This un
organized disposal of plastics has created wrong perception to environment
protection / safe guarding agencies about Plastics which are environment
resource conserving materials.
PET appears to be available in free form as used bottles on roads, but collection
& converting to a usable from is a major constraint.
The PET processing industries sell their process waste to collection agents
bypassing waste recycling companies leading to price escalation. This in turn
leads to in-sufficient availability of quality materials to the reprocessing industry.
By using PET flakes quality , almost equivalent to the virgin material, is available
at 60% of original cost.
Recycled PET is used, for non food grade applications like Bottles, Jars, Sheets,
Fiber, strap, zip fasteners etc.

INSTALLED CAPACITY

Product Installed No of working Capacity per Capacity per

capacity hours per day day annum
per hour 300 days per
annum
Reprocessing 3 MT 8 24 MTs 7200 MTs
Pet bottles
PLANT AND MACHNERY

Name Qty Value Rs.

In Lakhs

Bale Opening 1
Bottle washing 1
Bottle picking conveyor 1
Bottle conveyor 2
Crusher A 2
Screw conveyor A 2
Crusher B 2
Screw conveyor B 2
Float washing 1
Screw conveyor 1
Grinding washing 1
Screw conveyor 2
Chemical washing 2
Screw conveyor 2
Grinding washing 1
Filling mill 1
Screw conveyor 1
Bi-Screw washing 1
Bi-Screw washing 1
Spin-drier 1
Screw conveyor 1
Control panel 1
Heating dryer 1
Knives set 8

Total 50.00
MANUFACTURING PROCESS

The reprocessing of PET Bottles involves the following sequential operations

The plant is designed for the production of clean and dry flakes, starting from
PET bottles selected according to colour. The flakes can be used for further
processing (fibers) or the production of re-granulate (Extruder + Crystalliser), or
to recover the basic chemical components Terephtalic Acid and Ethylene
Glycole.

The material , old PET bottles arrives in bales and is put into a loading conveyor.
The binding wires have to be removed and the bales loosen up due to internal
elastic tension. For the grinding and washing plant no problem arises if some
bottles are still sticking together.

The grinding and washing plant is loaded by means of a mounting conveyor. The
plant grinds the material to flakes and cleaning is done due to material friction of
the flakes and the injected water. Paper labels are reduced to fibres and are
removed with other contaminants and with washing water. The bottles are
reduced to flakes form by the grinders.

Once collected, containers are forwarded to recycling locations where they are
run through grinders that reduce them to flake form. The flake then proceeds
through a separation and cleaning process that removes all foreign particles such
as paper, metal, and other plastic materials.

Having been cleaned according to market specifications, the recovered PET is

sold to manufacturers who convert them in to a variety of useful products such as
carpet fiber, strapping, moulding compounds, and non-food containers.
RAW MATERIALS
For MTS 7200
Qty-MTs Rate/MT Value Rs. Lakhs
Recycled PET Flakes 7344 20000 1468.80
0 0 0.00
TOTAL 1468.80
Packing materials 7200 100.00 7.20

LOCATION LAND AND BULIDING

Built up area-Sq.ft 10000
Rent p.m.-Rs per .5 per sq.ft 50000
Advance-10 months .Rs 500000

UTILITIES
Power & Fuel
Three phase- KW 300.00
Power charges Rs. lakhs p.a 34.20
For process-Litres per day 100000
Out of which re-cycled water-lt/day 80000
For human consumption-litres/day 200

Manpower
Monthly wages Total
Manager 1 10000 10000
Supervisor 1 8000 8000
Skilled 3 5000 15000
Unskilled 3 3000 9000
Accounts Assistant 1 4000 4000
Sales Executive 1 5000 5000
Security 2 2000 4000
sub total 55000
Add benefits 20% 11000
Total per month 66000
TOTAL PER ANNUM-Rs. lakhs 7.92
Schedule of implementation
After the financial arrangements are made the project can be implemented in 3
months times.

COST OF PROJECT AND MEANS OF FINANCE

ASSUMPTION
Installed capacity 7200 MTs per annum
Capacity utilisation Year-1 -60%
Year -2 -70%
Year-3 onwards- 80%
Selling price Rs. Rs. 25000 per MT
Raw materials As per the details given above
Packing materials As per details given above
Power Rs.34.20lakh per annum at 100%
Wages and salaries Rs. 7.92 lakhs with increase 5% every year.
Repairs and Maintenance Rs.1.20 lakhs per annum with 10% annual
increase.
Depreciation Written down value method -15 % on machinery
Selling general and Rs.300000 per month with 5% annual increase
administrative expenses
Interest on Term loan 11% per annum
Interest on working capital 11 % per annum
Income tax 33.66 % on profits

List of Machinery Suppliers:

1. D. G.P. Windsor India Ltd, 2 J, Century Plaza, Teynampet, Chennai – 600
018.
2. Europack Machines India Pvt Ltd, 52 Bindal Industrial Estate, Sakinaka,
Andhari East, Mumbai – 500 072.
3. Ambica Engineering & Wire Products, L 45, GIDC Estate, Odher, Ahmedabad–382415,
4. Hind Hydraulics & Engineers, Faridabad, Plot No. 13, Sector 74, Faridabad–121005.
5. Prasad Groups & Companies, Plot No. 14 – 16 GIDC Industrial Estate, Phase 1 Valva,
 Ahmedabad – 382445
6. HMT International Ltd, 59 HMT Bhavan, Bellary Road, Bangalore – 560 032.
List of Raw Material Suppliers:

1. Lucky Plastics, 421-c, Sngr Road Gpathy CBE-641006,

2. Maruthi Plastic, Old – 3 Thirupali ST Sowcarpet- 600 079,
3. Reliance Industries, 501 JVL Plaza Anna Salai, Teynampet – 600 018.
4. Shri Swastic PlastIcs, 57/2, Thirupalli Street – 79,
5. Abs Plastics Ltd, 51 Gidc Industrial Estate, Nadesari – 391340.
5 Polychem Ltd, 74 Jamshedji Tata Road, Mumbai – 400 020

FINANCIAL ASPECTS

1. COST OF PROJECT
[Rs.lakhs]

Land & Building (Advance) 5.00

Plant & Machinery 50.00
Other Misc. assets 2.00
Pre-Operative expenses 5.00
Margin for WC 24.00
86.00

2. MEANS OF FINANCE

Capital 48.50
Term Loan 37.50
86.00

3. COST OF PRODUCTION & PROFITABILITY STATEMENT

[Rs.lakhs]

Years 1 2 3 4 5

Installed Capacity-MTs 7200 7200 7200 7200 7200

Utilisation 60% 70% 80% 80% 80%
Production/Sales-MTs 4320 5040 5760 5760 5760

Selling Price per MT-Rs. 0.25 lakh

Sales Value (Rs.lakhs) 1080.00 1260.00 1440.00 1440.00 1440.00

Raw Materials 881.28 1028.16 1175.04 1175.04 1175.04

Packing Materials 4.32 5.04 5.76 5.76 5.76
Power 20.52 23.94 27.36 27.36 27.36
Wages & Salaries 7.92 8.32 8.74 9.18 9.64
Repairs & Maintenance 1.20 1.32 1.45 1.60 1.76
Depreciation 7.50 6.38 5.42 4.61 3.92
Cost of Production 922.74 1073.16 1223.77 1223.55 1223.48
Selling, Admin, & General exp 36.00 37.80 39.69 41.67 43.75
Interest on Term Loan 4.13 3.61 2.58 1.55 0.51
Interest on Working Capital 10.72 10.72 10.72 10.72 10.72
Total 973.59 1125.29 1276.76 1277.49 1278.46

Profit Before Tax 106.41 134.72 163.24 162.51 161.54

Provision for tax 35.82 45.35 54.95 54.70 54.38
Profit After Tax 70.59 89.37 108.29 107.81 107.16
Add: Depreciation 7.50 6.38 5.42 4.61 3.92
Cash Accruals 78.09 95.74 113.71 112.42 111.08

Repayment of Term loan 0.00 9.38 9.38 9.38 9.36

4. WORKING CAPITAL:

Months Values % Margin Bank

Consumptions Amount Finance

Raw Materials 0.50 36.72 25% 9.18 27.54

Consumables 2.00 0.72 25% 0.18 0.54
Finished goods 0.50 38.45 25% 9.61 28.84
Debtors 0.50 45.00 10% 4.50 40.50
Expenses 1.00 0.53 100% 0.53 0.00
121.42 24.00 97.42
6. PROFITABILITY RATIOS BASED ON 80% UTILISATION

Profit after Tax = 108.29 8%

Sales 1440.00

Profit before Interest and Tax = 176.54 96%

Total Investment 183.42

Profit after Tax = 108.29 223%

Promoters Capital 48.50

7. BREAK EVEN LEVEL

Fixed Cost (FC):

[Rs.lakhs]
Wages & Salaries 8.74
Repairs & Maintenance 1.45
Depreciation 5.42
Admin. & General expenses 39.69
Interest on TL 2.58
57.88

Profit Before Tax (P) 163.24

BEL = FC x 100 = 57.88 x 80 x 100

FC +P 221.12 100

21% of installed capacity