PAPER CUP

I. PRODUCT AND ITS USES

This project profile envisages the use of drinking Tea and Cool Drinks. The paper cup finds
extensive use in railways, Hotels, household appliances, domestic applications. The product ranges from
150 ml to 300 ml, this manufacturing activity may well be set-up as small-scale units.
As there is a good production of instead of plastic cups, weight less as well as easy to carry railway
Tea vendors, no environment pollution, increase the demand of paper cups, user customer are to be
encouraged in the modern days.
MARKET:
Because the paper cup industry is in a boom, the requirement of drinking items like Tea, coffee,
Cool Drinks for railways, Hotels, household appliances, domestic applications as well as for replacement
of plastic cups, Glass items. There is a tremendous requirement of day-to-day life.
II. MARKET POTENTIAL
III. PRODUCTION TARGETS (Per Annum)
Quantity
Value

56,43,000 Nos
Rs. 29,18,000

IV. BASIS & PRESUMPTIONS

1.
Single shift of 8 hours a day, 25 days a month and 300 days in an year is presumed. Efficient
machines and
workers are also presumed.
2.
Minimum 6 month period is considered for achieving full capacity utilization
3.
Labour rates are as per the prevailing rates.
4.
An average interest rate of 15% is considered.
5.
The estimates are drawn for a production capacity generally considered technoeconomically viable for model
type of manufacturing activity.
6.
The information supplied is based on a standard type of manufacturing activity viable for
model type of
manufacturing activity.
7.
The information supplied is based on a standard type of manufacturing activity utilising
conventional techniques
of production at optimum level of performance.
8.
Costs in respect of machinery and equipment, raw materials and the selling prices of the
finished products etc.
are generally prevailing at the time of preparation of the project profiles
and may vary depending upon
various factors.
9.
Whereas some names of manufacturers, suppliers of machinery and equipment, raw
materials etc. are indicated
at the end of the profile, those are by no means exclusive or
exhaustive.
V. IMPLEMENTATION SCHEDULE
Normally six months are required for the complete implementation of the project, including
machinery erection, raw materials procurement etc.
VI. PRODUCTION DETAILS AND PROCESS OF MANUFACTURE

The process of manufacture consists of the following operations.

The process of manufacturing Poly coated paper purchased from market then cut in the required
sizes, fabricate outer shell then put in the bottom mould pressed and pasting and keep it in the final paper
cup mould. After making the cup checked random pieces for customer requirement. Then packing by
plastic cover in 100 paper cups in a set.
VII. LAND & BUILDING
Land 250 sq.m.
Building 150

}
} Rented Rs. 5,000 p.m.
}

VIII. MACHINERY & EQIUPMENT

Sl.No. Description
1

Full Automatic Operation of Paper

cup Machine and other assembly

Dyes and Moulds

Office equipments and furniture

No.

Rs.

8,50,000

L.S.

50,000

50,000

Erection and electrification 10% of

the cost of machinery

10,000

Total

9,60,000

Pre operative expenses

10,000

Total

9,70,000

IX. STAFF AND LABOUR (Per Month)

Sl.No.

Description

Nos.

Salary (Rs.)

Manager

5,000

Production Supervisor

3,000

Accountant-cum-storekeeper

2,500

Watchman-cum-peon

1,500

Skilled Workers

5,000

Unskilled Workers

10,800

Total

27,800

Perquisites 15%

4,170

Total

31,970

Say

32,000

X. RAW MATERIALS (Per Month)

Special type of paper

(Poly coated paper) 2 Tones @
Rs.6, 000/-

Printing chemicals and Dyes

L.S.

5,000

Packing Material

L.S.

5,000

Total

1,20,000

1,30,000

XI. UTILITIES (Per Month)

Power 3000 units @ Rs.3.80/-

Water

11,400
300

Total

11,700

XII. OTHER EXPENSES (Per Month)

Postage and Stationer

500

Telephone

500

Consumable Stores

Repair and Maintenance

Transport Charges

Insurance

500

Misc. Expence

500

1,500
500
1,000

Total

5,000

XIII. WORKING CAPITAL FOR THREE MONTHS

Salary & Wages

32,100 x 3

96,000

Raw Materials

1,30,000 x 3

3,90,000

Utilities

11,700 x 3

35,100

Other expenses

5,000 x 3

15,000

1,78,700

5,36,100

Total
XIV. TOTAL CAPITAL INVESTMENT

Fixed capital

9,60,000

Working Capital

5,36,100
Total

14,96,100

MACHINERY UTILIZATION
The whole operation of Tea cup and Cool Drink Cups making process is involved simultaneously.
So the machine utilization has been taken 75% per day on single shift.
XV. COST OF PRODUCTION (Per Annum)

Total Recurring Expenditure

Depreciation on machinery @ 10%on 8,50,000

85,000

Depreciation on Moulds/Dies @ 25% on 65,000

12,500

Depreciation on Office Equipment @ 20% on

50,000

10,000

Interest on total capital @ 15% on14, 96, 100

2,24,400

Total
XVI. TOTAL SALES (Per Annum)
Annual production of paper cups 150 ml (Tea cup)

21,44,400

24,76,300

300 ml (cool Drink cup) Saleable materials

After allowing 5% rejection 2,97,000 Nos

59,40,000 Nos
56,43,000 Nos

XVII. PROFITABILITY (Per Annum)

Profit 27,00,000 24,64,350
= 2,35,650
Net Profit Ratio : Net profit x 100 / Turn over
= 2,35,650 x 100 / 27,00,000
= 8.92%
Rate of Return: Net profit x 100 / Total Investment
= 2,35,650 x 100 / 8,18,900
= 28.78%
XVII. FIXED COST
Depreciation of Machinery
Interest on total investment
Rent
40% on salary and wages
40% of Other expenditure

28,500/98,250/48,000/1,78,100/36,000/3,88,850/-

B.E.P. Fixed Cost x 100 / Fixed Cost + Profit

= 3,88,850 x 100 / 3,88,850+ 2,35,650
3,88,850 x 100 / 6,24,500
= 57.37%
XIX. NAMES AND ADDRESSES OF MACHINERY AND EQUIPMENT SUPPLIERS
1.

M/s. J.K.Enterprises,
62/173, Thiruvalluvar salai,
Alwarpet, Chennai.

2.

M/s. Jayveer Traders,

171-D, Raj Building, Thoddarayan koil street,
Kattoor, Coimbatore, Tamil nadu.

3.

M/s. Rockford Business Links,

K-120/6, Bougain villa,

Anna nagar East,
Chennai.
XX. NAMES AND ADDRESSES OF RAW MATERIAL SUPPLIERS
1.

M/s. Jagdish Fine Arts,

4/687/A, Husain Colony,
Sivakasi, Tamil Nadu.

2.

M/s. Vidya Laminators Private Limited,

112/236, Swaroop Nagar,
Kanpur, Uttar Pradesh.

3.

M/s. Lampack Paper Products,

A-1, Industrial Estate,
Visakapatnam, Andrapradesh.

4.

M/s. Kamakshi Lamipack private Limited,

101, Sidco Aiema Tower,
Ist Main Road, Industrial Estate,
Ambattur, Chennai.