PROJECT PROFILE ON

HDPE / PP WOVEN SACKS

PRODUCT : HDPE / PP WOVEN SACKS .
PRODUCT CODE : 303503009.
QUALITY & STANDARDS : As per Customer’s specification &
IS: 9755 – 1981 & IS:8069 – 1981.

PRODUCTION CAPACITY (P.A.) :

MONTH & YEAR OF PREPARATION : January, 2011.

PREPARED BY : MSME - Development Institu
PROJECT PROFILE ON
HDPE / PP WOVEN SACKS
1. INTRODUCTION
HDPE/PP oriented strips are becoming increasingly popular in India & have caught the eye of many end users for th
requirement of packing materials. They have become popular on account of their inertness towards chemical, moistu
excellent resistance towards rotting & fungus attack. They are non toxic. Lighter in weight & have more
advantages than conventional bags. PP/HDPE woven sacks laminated with LDPE/PP liner have wider
applications. HDPE woven sacks are much stronger & can withstand much higher impact loads because of HDPE
strips elongation at break is about 15-25% as compared to 30% of Jute. These sacks are much cleaner & resist f
attack. Jute prices are very unstable in the market since Jute is an agriculture product. These sacks ha
many advantages over other conventional sacks materials & are quite competitive in price.
The major users of HDPE/PP woven sacks are fertilizer, sugar, cattle feed, cement & other chemical Indus
Oil seeds, salt, starch, pesticides, detergents & many other items are also being packed in woven sacks. Fabric
HDPE strips is also ideal for the manufacture of shopping bags, sport hold-all, deck chairs, books binding
Cinema screen wall facing & carpet backing etc.
2. MARKET POTENTIAL:
At present there is under utilization of existing capacity due to marketing problems after introducing of Jute
packaging Mandatory Order 1986. The demand for woven sacks is sluggish for a variety of reasons.
A few years back Flat looms were used for the manufacture of woven sacks. Now it has been manufactured o
circular looms, which have high
productivity. This helped in minimizing the cost of production; however due to high cost of jute bags & also du
resistance to chemicals. Moisture etc. most of industry prefer HDPE/PP woven sacks for packaging.
3. BASIS AND PRESUMPTIONS:
1. The unit will run on single shift of 8 hours per day.25 days & 300 days per year.
2. The wastage during production is considered 2%.
3. The cost of land & building, plant & machinery, raw materials , labour cost & finished goods are as per prevailin
market rate.
4. One kg. of raw materials equal to 6.65 nos. of woven sacks.
4. IMPLEMENTATION SCHEDULE :
Every project requires some specific time for commercial production and are briefly as under:-
Sl. No. Activity Expected time
1. Acquisition of land 1 month
2. Filing of EM-I. 7 days
3. Building construction 3 months
4. Financial Arrangements 2 months
5. Procurement of Machinery 3-5 months
DPE / PP WOVEN SACKS .
503009.
per Customer’s specification &

Quantity : 353 M. T.
Value (Rs.) : 3,99,06,650

ry, 2011.
PREPARED BY : MSME - Development Institute, Ministry of Micro, Small & Medium Enterprises, Government of Ind
ngly popular in India & have caught the eye of many end users for their
come popular on account of their inertness towards chemical, moisture &
attack. They are non toxic. Lighter in weight & have more
E woven sacks laminated with LDPE/PP liner have wider
nger & can withstand much higher impact loads because of HDPE
s compared to 30% of Jute. These sacks are much cleaner & resist fungal
market since Jute is an agriculture product. These sacks have
acks materials & are quite competitive in price.
are fertilizer, sugar, cattle feed, cement & other chemical Industries.
& many other items are also being packed in woven sacks. Fabric from
re of shopping bags, sport hold-all, deck chairs, books binding
etc.

ng capacity due to marketing problems after introducing of Jute

and for woven sacks is sluggish for a variety of reasons.
manufacture of woven sacks. Now it has been manufactured on
 st of production; however due to high cost of jute bags & also due to
st of industry prefer HDPE/PP woven sacks for packaging.

day.25 days & 300 days per year.

2%.
hinery, raw materials , labour cost & finished goods are as per prevailing

f woven sacks.

commercial production and are briefly as under:-

Expected time
1 month
7 days
3 months
2 months
3-5 months
 6. Installation, electrification and commissioning
of machinery and other facilities
7. NOC from Pollution Control Board 1- 2 months
8. Trial run From 9
months onwards

5. TECHNICAL ASPECTS
i) Production detail & Process of Manufacture:
The process involve the production of tape with the help of tape extrusion machine followed by knitting to form
on circular weaving machine, which cut into required length & width & stitched with the help of industrial sewing
machine. A printing may also be done as per requirement on cloth with the help of two colour printing machine.
ii) Quality Control & Specification:
IS : 6753- – 1981 for fertilizers IS : 8069- – 1981 for pesticides
HDPE woven sacks can also be manufactured as per the requirement & major purchasers.
iii) Production Capacity ( per annum )
 1-3 months

1- 2 months
From 9

hine followed by knitting to form cloth

d with the help of industrial sewing
p of two colour printing machine.

purchasers.
 a) Quantity : 475 M.T.
b) Value (Rs.) : Rs. 4,73,81,250
iv) Motive Power Requirement:
185 KW (250 HP Approx.)
6. FINANCIAL ASPECTS:
(A) Fixed Capital:
i) Land and Building :

Land – 4000 Sq. Mtrs. @ Rs. 500/- Sq. Mtrs. Rs. 20,00,000/-
Built up Ara – 9000 Sq. Fts. @ Rs. 1000/- Sq. Ft. Rs. 90,00,000/-
Total: Rs. 1,10,00,000/-
ii) Plant & Machinery:
Sl. Description Qty
No. (Nos.)
1 Tape extrusion line cap. 135-150 kg/hr. model Lohia Lorex E 60.600M 1

2 Chease winders with shuttles 12

3 Circular weaving machine 1
4 Heavy duty sewing machine 10
5 Two colour printing machine with max. print area 28”X43” with 3 HP motor 1

6 Weighing machine
7 Laboratory equipment 1
8 Transformer 11 KVA
9 Other expenses
10 Electrification & installation charges @ 10% of the cost of plant & machinery

11 Office furniture
Total:
Total Fixed Capital Requirement:
1 Land & Building
2 Plant & Machinery
Total:

(B) Working Capital (Per Month):

i) Staff and Labour ( per month)

Sl. No. Designation No. Rate (Rs.) Amount (Rs.)

1 Work Manager 1 12000 12,000/-
2 Sales Manager 1 8000 8,000/-
3 Accountant 1 5000 5,000/-
4 Store keeper 1 5000 5,000/-
5 Clerk cum typist 2 5000 10,000/-
6 Foreman 1 6000 6,000/-
7 Supervisor 4 4500 18,000/-
8 Skilled Worker 4 4000 16,000/-
9 Unskilled Worker 10 3000 30,000/-
10 Electrician 1 4000 4,000/-
11 Fitter 1 4000 4,000/-
12 Peon/Guard 4 3000 12,000/-
Sub- Total 1,30,000/-
Perquisites @ 15% of salary 19,500/-
Total 1,49,500/-
 Value
(Rs.)
95,00,000/-

3,60,000/-
20,00,000/-
3,60,000/-
5,00,000/-

20,000/-
2,00,000/-
1,60,000/-
50,000/-
13,10,000/-

75,000/-
1,45,35,000/-

1,10,00,000/-
1,45,35,000/-
2,55,35,000/-

Amount (Rs.)
12,000/-
8,000/-
5,000/-
5,000/-
10,000/-
6,000/-
18,000/-
16,000/-
30,000/-
4,000/-
4,000/-
12,000/-
1,30,000/-
19,500/-
1,49,500/-
 ii) Raw Material:
Sl. No. Particulars Quantity Rate (Rs) Value (Rs.)
1 HDPE / PP Granules 30 MT 62000/MT 18,60,000/-
2 Other misc. items. 25,000/-
Total 18,85,000/-
iii) Utilities:
Sl. No. Particulars Quantity Rate Value (Rs.)
1 Electricity & Power 40000 units Rs. 5.50/unit 2,20,000/-
2 Water 10,000/-
Total 2,30,000/-
iv) Other Contingent Expenses:
Sl. No. Description Amount in Rs.
1 Telephone and stationery : 5,000/-
2 Travelling & Transport : 10,000/-
3 Advertisement & Publicity : 50,000/-
4 Repair & Maintenance : 10,000/-
5 Insurance & Taxes : 15,000/-
6 Other expenditure : 10,000/-
Total : 1,00,000/-
v) Total Recurring Expenses.
a. Salary & Wages : 1,49,500/-
b. Raw material : 18,85,000/-
c. Utilities : 2,30,000/-
d. Other contingent expenses : 1,00,000/-
Total: : 23,64,500/-
Total Working Capital for 3 months = 23,64,500 X 3 = : Rs.70,93,500/-
7. Total Capital Investment:
a) Fixed Capital 2,55,35,000/-
b) Working Capital for 3 months 70,93,500/-
Total: 3,26,28,500/-
e (Rs.)
18,60,000/-
25,000/-
18,85,000/-

alue (Rs.)
2,20,000/-
10,000/-
2,30,000/-
 Means of Finance:
i) Promoter’s share 25% 81,57,125/-
ii) Loan from Financial Institution 75% 2,44,71,375/-
Total: 3,26,28,500/-
8. Financial Analysis:
(A) Cost of production (Recurring Expenses) ( per annum )

S. No. Particulars Amount (Rs.)

1 Total Recurring Expenditure 2,83,74,000/-
2 Depreciation on Building @ 5% 4,50,000/-
3 Depreciation on Machinery & Equipments @ 10% (Except 13,10,000/-
Electrification & Installation, Trial run)
4 Interest on 75% on loan @ 12.5% p.a. 30,59,000/-
Total : 3,31,93,000/-
(B) Turnover (per annum)
Sales proceeds as shown below:
Item Quantity (M.T.) Rate (Rs.) Value (Rs.)
HDPE / PP Woven Sacks 353 MT Rs. 17/each 3,99,06,650/-
2347450 bags
(C) Net Profit (Per Annum):
Turn Over (-) Cost of Production Rs. 67,13,650/-
3,99,06,650/- (-) 3,31,93,000/- = 16.82%
(D) Net Profit Ratio (Per Annum): = 20.57%
Profit/annum X 100 67,13,650/-X 100
Sales Per Annum 3,99,06,650/-
(E) Rate of Return:
Profit/Annum X 100 67,13,650/- X 100 Total Capital
Investment 3,26,28,500/-
81,57,125/-
,44,71,375/-
,26,28,500/-

Rs. 67,13,650/-
= 16.82%
= 20.57%
 (F) BREAK EVEN POINT:
Fixed Cost (Per Annum):

1 Depreciation on Building @ 5% p.a.

2 Depreciation on Plant & Machinery @ 10% p.a.
3 Interest on loan @ 12.5% p.a.
4 40% salary and wages
5 40% of Utilities
6 40% of other expenses
Total Fixed Cost:
Break Even Point:
Fixed Cost X 100 71,20,600/- X 100 = 51.47%
Fixed Cost + Profit 71,20,600/- + 67,13,650/-
9. Names and Addresses of Plant & Machinery Suppliers:
1. M/s Lohia Starlinger Limited,
D-3/A, Panki Industrial Estate, Kanpur-208022.

2. M/s Brimco Plastic Machinery Pvt. Ltd.,

Brimco House, 55, Govt. Industrial Estate, Kandivili, Mumbai-400067.
3. M/s Boolani Engg. Corporation,
402, Veer Savarkar Road,, Prabhadevi Industrial Estate, Mumbai-400025.
10. Names & Addresses of Raw Material Suppliers:
1. M/s Hoechst Dyes & Chemicals Limited,
Hoechst House, 193, Backbay Reclamation Nariman Point, Mumbai-400021.
2. GAIL, Dibiyapur, Dist. Auraiya. (U.P.)
*******
 4,50,000/-
13,10,000/-
30,59,000/-
7,17,600/-
11,04,000/-
4,80,000/-
71,20,600/-

= 51.47%