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Chapter-I

Company Overview
INTRODUCTION
Narail Papers Mills Ltd. (Proposed) will be a Paper manufacturing unit to be set up in Narail. In our country, export volume in RMG sector covers about 70% of total volume of countrys export. RMG products are stored in paper made cartoon and these papers are mainly imported from other country. Making these papers) is not tough job in our country as we have sufficient raw materials and well known technical hands. Further, setting of this paper industry will save huge foreign currency as well as lead time for our RMG industry. This factors promote all the sponsors to start such venture.

PROMOTERS
The project is being promoted as a private limited company by a group of 2(two) persons. The particulars of the promoting directors with their position and extent of share holding in the company are as under : Sl. No. 1. 2. Name of the Promoters M.G.K. Jewel Asif-U-Daula Present Address 16, Mahanagar Project,Rampura ,Dhaka Vill+Thana+Post :Lohagara,Distri ct:Narail Permanent Status Shareholding 50% 50% Address Vill+Thana+P Chairman ost:Lohagara, District:Narail Vill+Thana+P Managing ost:Lohagara, Director District:Narail

CREDIT WORTHINESS OF THE DIRECTORS :


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(Taka in 000) Sl.No Name of the Director Immovable properties 1. 2. M.G.K. Jewel Asif-U-Daula Total : 33450 7000 40450 23657 12682 36339 57107 19682 76789 Investment Total

CORPORATE SET-UP
The sponsors will form a private limited company. The company will be got registered with the office of the Registrar of Joint Stock Companies, Dhaka. The overall management will be vested with the Managing Director of the company who will be assisted by the other sponsoring directors. The Board of Directors will decide and formulate policies and will provide guidelines for smooth operation of day-to-day business. Besides, skilled local personnel will be recruited for smooth operation of the project.

Chapter-II Page 2 of 16

Product
The annual production capacity of the project on the based on 360 working days in a year is given below :Table-I Sl. No. Items of production 1. High quality Paper Unit Ton Quantity 15000

The above production schedule /quantity may be changed as per market demand.

Chapter III Page 3 of 16

Marketing Aspect
Paper is the carrier of knowledge. It is part & parcel of Modern civilization. Now a days, we cannot think without paper for its diversification of use. Presently in Bangladesh the garment sector holds a very important position in our industrial arena in respect of its contribution to employment, value addition and foreign exchange earning. At present, garment is the highest export-earning sector in the country. The garments & sweeter are exported in the corrugated cartoon box, which is made of Kraft and Liner paper. These papers are mostly imported from Korea & India.

DEMAND ESTIMATION OF THE KRAFT, LINER PAPER & OTHER PAPER In 000 MT Table-II Category paper Kraft & paper Other Paper Total of 1991 Liner 28 24 52 1996 36 39 75 2001 55 64 119 2004 90 105 195 2008 110 125 235 2012 135 150 285

SUPPLY GAP OF PAPER


From the Table - II & estimated supply of paper in the country we can calculate the difference between demand and supply i.e. supply gap in the below Table - III. Table-III In 000 MT Year 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 Estimated demand 234 280 336 403 483 580 696 835 Potential supply 120 120 120 120 120 120 120 120 Gap 114 160 216 283 363 460 576 715 Page 4 of 16

2009 2010 2010-2011 2011-2012

1000 1200 1350

120 120 120

880 1080 1230

MARKET SHARE
The annual rated capacity of the proposed unit is 15,000 MT. The project is expected to go into commercial operation in 2013 and it would be able to satisfy about 1.11% of the existing supply gap as shown in Table-IV TABLE-IV MARKET SHARE (in 000MT.) Year 2011-2012 Supply gap 1350 Proposed capacity 15 Market share(%) 1.11

OUTPUT PRICE
The project will produce Kraft paper. The present CFR price of the of kraft paper varies from US$ 400.00 to US$ 450.00 per MT. However proposed selling price of the product considered at US$ 375.00 eqvt. Tk 26,250

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Chapter IV

Management plan
The technology involved in manufacturing kraft & liner paper is already available in the country. A good number of units are in operation since long. Training facilities are also available from the Government as well as from the private sector and hence, trained personnel are also available locally. Besides, the required machinery and equipment will be installed and commissioned under the supervision of the machinery supplier. Necessary technical personnel are also be trained by the experts of supplier of machinery. As such, it is expected that the project will not face any dearth of technical staff for maintaining the Farm.

MANPOWER
The total manpower requirement for the project during commercial operation has been estimated and category wise personnel have been shown below, which will be recruited locally:Sl.No. A. Name of the post Technical: Production Manager (Mill Incharge) Asstt. Production Manager Mechanical Engineer (maintenance) Electrical Engineer (maintenance) Machine Operator Generator Operator Skilled Labor Semi skilled Labor Peon/ Guard/ Sweeper Total : Administrative: General Manager Commercial Manager Sr. Executive Commercial Officer Store Officer Accountant/Computer Operator Driver Peon/ Guard Nos. 1 1 1 1 10 3 45 60 9 131 1 2 2 1 2 4 3 9 Page 6 of 16

B.

Sl.No. Total :

Name of the post Grand Total ( A+B) :

Nos. 24 155

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Chapter-5

Operating Plan
BRIEF DESCRIPTION OF THE PROJECT Purpose and Design The proposal envisages setting up of a 100% export oriented modern & sophisticated paper mill for manufacturing Kraft & liner paper in the name and style of Narail Papers Mills Ltd. (Proposed). In Bangladesh the demand for the proposed products are gradually increasing day by day by the increase of the export oriented garment industries in the country. This has encouraged the promoters to set up this project in the country. The imported machinery will be of Chinese, USA origin. Besides the imported machinery the project will require some local machinery. After implementation of the project it will create job opportunity for 161 persons in different category and grade. The fixed cost of the project has been estimated at Tk. 3455.53 lac. Manufacturing Process The technology involved in manufacturing of Kraft & Liner Paper is very simple and available in the country. First the waste paper & chemical mixed in required proportion in the pulp section. In this section some pulp will mixed with waste paper for making whiteness of the product. Production of Kraft & liner paper depends upon the mixing of waste paper, chemical & pulp. After mixing the mixture passes through the Three Roll Calendar & Paper Rolling machine . After rolling the paper winded in the Rewinder. During the process the paper dried by steam.

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The process flow diagram is reflected as below:FLOW DIAGRAM Mixing of waste paper, chemical & pulp

Passing through Three Roll Calendar Passing through Paper Rolling Machine Heating Rewinding

Packing Marketing Building and other civil Works The civil works for the project includes Main Factory Building includes Pulping Section, paper making section, finishing section, cutting & packaging section etc. with overhead crane installation. Besides main factory building the civil works includes raw material godown, finished goods godown, generator & sub station room, engineering workshop, 2 storied office cum officers quarter etc. The civil works will be made of pre-engineered structure & RCC structure, brick masonry walls, mosaic floor, doors, windows etc. The total cost of civil works including electrification & sanitation has been estimated at Tk.531.96 lac.

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Machinery and equipment: Imported The imported machinery and equipment of the project are consists of Pressure mould paper mould machine, Three roll Calendar, Paper rolling machine, Rewinder, Pulping section Boiler, Gas generator etc. The Main machinery has been proposed to be imported from China, USA. The total cost of the imported machinery is estimated at Tk. 2217.05 lac. Local The project will also require some local machinery / equipment which will include Deep tubewell, Electrical sub station equipment, different gas & steam pipelines etc. The total cost of the local machinery is estimated at Tk.210.00 lac Installation The supplier of machinery will conduct the installation of machinery. The Erection, installation, test operation and commissioning of main machinery & equipment will be carried out by local erectors under the overall supervision of foreign experts to be deputed by the supplier of machinery. An amount of Taka 45.00 lac has been estimated for this purpose. Utilities (i) Water: The daily requirement of water has been estimated at 1,000 litre per day, which will be made available from projects own Deep tube well to be sunk at the project site. The cost of installation of Deep tube well with pump and motor has been estimated at Tk. 25.00 lac, the cost of which included in the local machinery. (ii) Power: The project will use own generated electricity. The max m. demand would be around 1500 kw.The power will be available from the projects own generator. Apart from the gas generator the project will procure a 2 nos.750 KVA electrical sub station equipment for un-interrupted operation. The cost of Electrical Sub-Station set included in the list of local machinery (iii) Fuel & Lubricant : The project will require the following items annually:

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Item Lubricating oil Grease Diesel Kerosene oil Gas Transportation

Quantity 200 kg 2000 litre 15000 litre 3000 litre 200000 cu.ft

For the project 1(one) Pick-up Van with 3 ton capacity for carrying finished goods & 1 (one) car to be used by the Officers.. The Cost of the pick-up Van & car has been estimated at Tk. 25.00 lac. Raw materials The raw materials for the project are the waste paper & chemical in which chemical will be imported & waste paper will be procured locally. The requirement of raw material has been given below: Sl.No. Item Unit Ton Quantity 15 A. Imported: 1. Chemical B. Local 3. 4. Stores & Spares: The annual requirement of stores and spares for the machinery and equipment has been estimated at 0.5%, 1%, 1.5% and 2% of its cost for the 1st, 2nd, 3rd and 4th years of operation respectively. Repair and Maintenance: The annual requirement of repair and maintenance for the machinery has been estimated at . 05%, 1%, 1.5% and 2% of its cost for the 1 st, 2nd, 3rd and 4th year of operation respectively. The repair and maintenance cost of building has been estimate @0.5% of its cost for every year. Safety Provision:

Waste paper Packing material

Ton L.S

16667 Tk.10.00 lac

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Necessary arrangement will be made to fight against fair hazard by procuring fire fighting equipment for which an amount of Tk. 200,000.00 has been earmarked. Office fixture and furniture: An amount of Tk. 3.50 lac has been estimated for procurement of office equipment, furniture to be required for the project. Schedule of Construction: The project will start commercial operation within 9 (nine) months from the date of opening of L/C. for machinery.

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Chapter-vi

Financial Evalution
Cost of the project The total cost of the project has been estimated at Tk 3514.04 lac including a net working capital of Taka 58.52 lac. The summarized project cost is presented below: (Taka in 000) Items Land Building Plant & Machinery Local Machinery Erection & Installation Furniture, Fixture & Equipment Vehicle Safety equipment Consultant's Fee Pre-operating Expenses Interest During Construction Total Fixed Cost Working capital (net) Total capital outlay : : : : : : : : : : : : To be incurred 8381 51396 230573 21000 11000 350 2500 200 500 3717 15936 345553 5852 351404

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Means of finance The aforesaid cost is proposed to be financed as under : (Taka in 000) Items Banks loan (Proposed) Total loan Equity Sponsors investment Total Equity Total Loan & Equity Profitability (Taka in 000) Sales Revenue Cost of Goods Sold Gross Profit Gen.Admin & other expenses Operating Profit Financial expenses Net Operating Profit Before tax Income Tax Investment Net Profit after Investment Year 1 Year 2 Year 3 Year 4 226091 254730 274736 275594 150269 167667 182933 186355 75822 87063 91803 89239 5150 5423 5695 5943 70672 81640 86108 83296 23820 22893 20885 18593 46852 58747 65223 64703 20% Tax 9370 37482 Holiday 11749 13045 46998 52178 12941 51762 : : : : To be incurred 228413 228413 122992 122992 351404

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Capital structure The authorized capital & paid-up capital of the company will be Tk. 3600.00 lac and Tk. 1229.92 lac respectively. Financial evaluation : Profitability potential of the project has been estimated for four years of operation to assess the financial viability of the project. The financial projections include estimation of sales, operating cost, administrative and selling expenses and financial overheads. The main assumptions of earning forecast are as follows: (i) ii) iii) The factory will work on the basis of three shifts (8 hours each) operation per day and 300 working days in a year; The cost of raw materials and the sales has been calculated on the basis of prevailing market prices; The cost of raw materials as well as the selling price of the finished goods have been assumed to be kept constant throughout the projected years on the assumptions that any increase in the price of raw materials will be off-set by the consequential increase in selling prices; iv) v) In calculation of working capital requirement, stock of raw material has been considered for 30 (thirty days). An increment @ 5% per annum has been considered in the calculation of wages and salaries and the amount of bonus is considered to be equal to two months pay; vi) Depreciation bas been charged on straight line method on the following rates: Building Machinery Other assets vii) viii) 5% 10% 20%

Capacity utilization has been assumed at 60%, 65%, 70%, 70% in 1 st, 2nd, 3rd, and 4th years of operation respectively; Economic life of the project has been assumed to be 10 years without any major replacement. Page 15 of 16

Chapter-vi

Ecological Aspect
The production and use of paper has a number of adverse effects on the environment which are known collectively as paper pollution. Pulp mills contribute to deforestation, air, water and land pollution. Discarded paper is a major component of many landfill sites. Paper recycling can be a source of pollution due to the sludge produced during deinking. Worldwide, the pulp and paper industry is the fifth largest consumer of energy, accounting for four percent of all the world's energy use. The pulp and paper industry uses more water to produce a ton of product than any other industry. However, The social benifit of project is more than that of environmental cost.

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