HORANA PROJECT

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Objective

• Establish effective supply system of packing material to USL and grow with them from Rs 374 m to Rs 750 m with in 3 years period by reducing cost factors and improving communication method and direct business relationship.

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USL Turnover – Rs BillionYear Rs Billion %2010/11 24 2011/12 28 19 2012/13 31 11 2013/14 35 13 2014/15 41 17

2010/11 2011/12 2012/13 2013/14 2014/150

5

10

15

20

25

30

35

40

45

24

2831

35

41

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Phoenix Turnover – Rs mYear PC TB Food Tube Total %2010/11 72 95 2 169 2011/12 114 95 8 217 22 PC

2012/13 168 98 49 315 45 TB

2013/14 180 114 80 374 19 Food

2014/15 300 150 150 150 750 101 Tube

2010/11 2011/12 2012/13 2013/14 2014/150

100

200

300

400

500

600

700

800

72 114168 180

30095

9598 114

150

28

4980

150

150

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Current Situation

• Operating in two different location– PC and Food items at Makandura– Tooth brush at Welisara

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PC Production PRODUCT QTY MC CT MC HR CAPACITY UTILIZATION

1 PBC 50 ml 150,000 BM - 19 300 588 BM - 19 - 82 %

2 PBC 100 ml 270,000 BM - 03 550 578 BM - 03 - 89 %

3 PBC 200 ML 30,000 BM - 28 400 88

4 Vaseline 100 ml 300,000 BM - 15 550 642 BM - 15 - 89 %

5 Vaseline 300 ml 20,000 BM - 28 360 65 BM - 28 - 66 %

7 Ponds 100 g 50,000 BM - 12 550 107 BM - 12 - 43 %

8 Lux 120 ml 20,000 BM - 12 550 43

9 lux 220 ml 50,000 BM - 12 360 163

10 Ponds TV100 ml 30,000 BM - 03 550 64

11 Domex 250 ml 30,000 BM - 28 300 118

12 Domex 500 ml 50,000 BM - 28 250 235

13 PBC Lids 500,000 IM - 50 1200 490 IM - 50 - 90 %

14 Ponds Lids 30,000 IM - 50 400 88

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Current Labour AllocationMachine MC No Labour Allocation BM - 03 01

BM - 12 01

BM - 15 01

BM - 19 0.5

BM - 28 1.5

IM - 50 02

Total 07

Other RM 01

QC 0.5

Prod; Super: 0.5

Maintenance 2.5

QC 0.5

Total 05

Printing Labeling & Sleeving

09

Prod; Super; 0.5

FG 1.0

Total 10.5

Per shift – Production -07Supporting service - 05Shift total - 12Total - 36 (3 shift) Day shift - 10.5Total - 47 nos

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Project Plan

• Including 4 no of steps– Shifting all FG stock to Horana and supply to USL

as a daily basis– Relocate BM and IM– Relocate Tooth brush operation– Establish new Tube machine

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FG Storage

• Maintaining 2 weeks buffer stock• To eliminate delivery issues • Reduce our stock holding cost• Minimize the communication gap• Hand over pallet by pallet – Use fork leaf

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2 week buffer stock and required space ITEM QTY No of

Items per pallet

No of SKU

No of Pallets

Required Pallet with

SKU

Required Space Sq feet

1 PBC 50 ml 65000 12096 4 5 8 162

2 PBC 100 ml 130000 9216 8 14 21 425

3 PBC 200 ML 13000 4320 4 3 6 122

4 Vaseline 100 ml 135000 10368 3 13 15 304

5 Vaseline 300 ml 10000 3348 3 3 5 101

7 Ponds 100 g 25000 5760 2 4 5 101

8 Lux 120 ml 10000 5760 3 2 3 61

9 lux 220 ml 25000 4800 4 5 8 162

10 Ponds TV100 ml 13000 6912 1 2 2 41

11 Domex 300 ml 25000 2304 3 11 12 243

12 Domex 500 ml 25000 1152 3 22 22 446

13 PBC Lids 250000 96000 4 3 6 122

14 Ponds Lids 13000 72000 1 0 1 20

15 Phoenix Jar 50000 2700 1 19 19 385

44 106 133 2,693

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Requirements

• No of pallet required – 140 nos• Required space - 6800 sqft

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Relocate BM & IM MachineOption – 1 BM separate production line and printing separate production line

Machine MC No Labour Allocation

Remarks

BM - 03 0.5 Conveyor with deflashing BM - 12 0.5 Conveyor with deflashing BM - 15 0.5 Conveyor with deflashing BM - 19 0.5 Conveyor with deflashing BM - 28 1.0 Deflashing IM - 50 1.0 Lid closing unit Total 04 Other RM 01 QC 0.5 Prod; Super: 0.5 Maintenance 1.0 Total 3.0 Shift Total 7.0 Printing Labeling & Sleeving 9.0 FG 2.0 Total 11.0 Shift total 21.0 Grand Total 32.0

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Option – 2BM machine couple with online printing

Machine MC No Remarks Labour Allocation BM

Labour Allocation Printing

BM - 15 Direct couple with labeling MC 0 01 BM - 03 Couple with shrink tunnel -1 01 0.65 BM - 19 Couple with shrink tunnel -1 01 0.65 BM - 12 Couple with shrink tunnel - 2 01 0.65 BM - 28 01 IM - 50 01 Total 05 03Other RM 01 PS 0.5 QC 0.5 Maint: 1.0 Total 03 Shift Total 11 Total 3 shift 33 Day FG & RM 02 Total 35

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Option - 3

• BM 28 replaced by New 3 layer machine• In addition to other product Can be produced

Dove containers• Carder not change• BM 28 can be used for another products

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Comparison of labour allocation Present ,Option 1 & Option 2

Present Carder

Option - 1 Reduction % Option - 2 Reduction %

Shift - Prod 07 04 43 08 (13)

Shift - Others 05 03 40 03 40

Shift - Total 12 07 44 11 8.33

Total – 3 shift 36 21 42 33 8

Day - Printing 9.5 09 05 - -

Day – FG 01 02 (100) 02 (100)

Grand Total 47 32 32 35 25.53

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Potential New Business

• Containers• Lids• Tube

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ContainersProduct Monthly Qty Monthly Turn

Over RsAnnual Turnover Rs

Domex 300 ml 25,000 200,000 2,400,000

Dove 200 ml 25,000 225,000 2,700,000

Total 425,000 5,100,000

These moulds can be produced on new 3 layer machineUSL will provide the Domex mould and Dove mould we have to make.

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LidsProduct Monthly Qty Monthly TO Rs Annual TO Rs Moulds Cost

Vaseline 100 ml 240,000 1,320,000 15,840,000 USL

Sunslik 100 ml 144,000 770,000 9,240,000 USL

Lifebuoy 100ml 180,000 990,000 11,880,000 USL

Domex lids 80,000 320,000 3,840,000 USL

Total 3,400,000 40,000,000

USL will provide the mould cost, but we have to bear the machine costRefurbished MC will be ready on mid-June

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Tube

• USL agreed to give us a 50 % of orders • Annual Turn over 150 m• We have to purchase a Machine

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Phoenix Market Share

Description 2012/13 2013/2014 2014/2015USL packing buy 500 560 672Phoenix supply 217 260 450 with promotionShare - % 43.4 46.42 66.96

PC & Food

Description 2012/13 2013/2014 2014/2015USL packing buy 400 460 552Phoenix supply 98 114 150Share - % 24.5 24.78 27.17

TB

Description 2012/13 2013/2014 2014/2015

USL packing buy 288 322 386Phoenix supply 0 0 150

Share - % 39

Tubes

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Cost Benefit

Description Makandura Horana Saving per month

Man Power 47 – Rs 1,175,000 32 – Rs 800,000 Rs 375,000

Transport Rs 400,000 Rs 100,000 Rs 300,000

Rs 675,000

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Investment

• Required cost per – To start step 1 – Rs.– To start step 2 – Rs

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Our Vision – by end 2015

Personal Care 150 Mil

TB 150 Mil

Food Packaging 150 Mil

Tubes 150 Mil

Promotions 150 Mil

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Thanks