I. INTRODUCTION

OBJECTIVE OF THE PROJECT

1) To setup a manufacturing unit for the production of Corrugated Boxes.

2) To provide the customers with strongest and good quality corrugated boxes at cheaper

rates.

3) To achieve full capacity in five years by acquiring new orders.

RATIONALE & SCOPE /PROSPECTS OF THE PROJECT:

Corrugated Packaging is visible wherever goods are produced, transported and displayed.

Since its invention years ago, corrugated packaging has ensured efficient safe and

sanitary transit of goods, protecting and wrapping about 70% of the world’s liquid and

solid materials from producer to consumer.

In India, the demand for corrugated packages is increasing, as the industry is growing at

the rate of 22-25 per cent per annum according to Pack Plus. Corrugated packaging

protects the product during storage, transportation and handling. Thus the package, by

virtue of its protective function-becomes a vital link in the distribution chain. Also

corrugated cartons offer the most practical and economic choice for packaging.

Product range includes consumer packages, food and non food-packages, transport

packages.

The aforementioned qualities have made Corrugated Fiber Board Boxes rapidly popular.

Some of the recent survey has revealed that 80% to 85% is now being done by it.

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REVIEW OF INDUSTRIES RELATED TO THE PRODUCT:

A list of major industries, in which it is extensively used at present, is being given below:

1. Breweries

2. Glass-wares

3. Cigarettes

4. Pharmaceuticals

5. Soap & cosmetics

6. Milk & milk products

7. Biscuits

8. Tea & coffee

9. Hosiery & footwear

10. Toys

11. Photographic Equipments

12. Textiles & ready-made garments

13. Electric goods

14. Electric bulbs

15. Hardware

16. Bicycle & auto parts

17. Rubber and rubber products

18. Stationery

19. Matches

20. Defense

21. Food Preservation

22. Cashew Nut Industry

23. Synthetic (Man-Made) Industry

24. Horticulture products, tobacco

25. Apple, Cherry, Grapes etc.

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II. TECHNICAL FEASIBILITY

A. DESCRIPTION OF THE PRODUCT:

CORRUGATED BOARD

Corrugated fiberboard is a paper-based construction material consisting of a fluted

corrugated sheet and one or two flat linerboards. It is widely used in the manufacture

of corrugated boxes and shipping containers.

Corrugated board is made with a corrugated sheet of paper attached to the facings of

flat paper usually craft by machine. Here two paper reels run together. One layer of

paper becomes corrugated after passing through the heated corrugated rolls and the

other is bought into contact with it after former having glued at the tips. Thus, both

get pasted together. Then, rolls of these corrugated sheets are made.

The resulting roll is known as 2 ply or single face corrugated board. By cutting this

roll with BOARD CUTTER and then gluing the corrugated side by pasting machine

and then placing the 3rd ply of paper over it, double face under produced. This board

is kept under pressure in SHEET PRESSING machine for some time, for setting of

wet glued sheets. Similarly, board over board can be pasted to produce thicker boards

of width of 5-ply, 7-ply, and 9-ply.

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B. PRODUCT SPECIFICATIONS:

Product specifications are provided by the customer according to their needs. The product

specification can be categorized into following forms:

1. Designation of box

2. Product to be packed

3. Quantity and arrangement of contents in the box (alternatives)

4. Style/construction of the box, including interior fitments

5. Type of corrugated board/flute configuration

6. Quality grade of corrugated board/eventual raw materials specifications

7. Minimum required bursting strength (Mullen)

8. Inside dimensions of the box/eventual tolerances

9. Type of manufacturers’ joint

10. Special features/treatments

11. Detailed printing instructions, including quality certificate stamp

12. Quantity of purchase (alternatives)

13. Method of packing/shipping empty boxes

Various sizes of boxes that we are manufacturing:

Size 1 Size 2 Size 3 Size 4

10*10*8 22*15*10 16*16*16 20*20*10

3-ply 5-ply 5-ply 5-ply

The paper width taken by us is of 22-28 BF. BF is the abbreviation of BURST FACTOR.

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C. USES OF PRODUCT:

Corrugated boxes are used for packaging purposes.

A list of major industries, in which it is extensively used at present, is being given below:

1. Breweries

2. Glass-wares

3. Cigarettes

4. Pharmaceuticals

5. Soap & cosmetics

6. Milk & milk products

7. Biscuits

8. Tea & coffee

9. Hosiery & footwear

10. Toys

11. Photographic Equipments

12. Textiles & ready-made garments

13. Electric goods

14. Electric bulbs

15. Hardware

16. Bicycle & auto parts

17. Rubber and rubber products

18. Stationery

19. Matches

20. Defense

21. Food Preservation

22. Cashew Nut Industry

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23. Synthetic (Man-Made) Industry

24. Horticulture products, tobacco

25. Apple, Cherry, Grapes etc.

D. MANUFACTURING PROCESS OF CORRUGATED BOXES:

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Raw Material Purchase

E. ALTERNATIVE MANUFACTURING PROCESS:

Corrugation

Paper Cutting

Pasting

Die Cutting Machine(Rotary + Slotting)

Stapling

Sun Drying

Dispatch

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F. JUSTIFICATION OF THE ADOPTED PROCESS:

Corrugation

Paper Cutting

Pasting

Rotary

Slotting

Stapling

Sun Drying

Dispatch

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The process starts with paper being converted into corrugated boards on the corrugation

machine. These corrugated boards are converted into corrugated board reels and are sent

for cutting. Cutting is done according to the specifications provided by the customers.

Pasting is done on the pasting machine. In this the width of the board can be deterred

according to the customer requirements.

Now, our manufacturing process is different from the alternative manufacturing process

because we are using Die Cutting Machine instead of Rotary and Slotting machines.

BENEFITS OF USING DIE-CUTTING MACHINE OVER ALTERNATIVE

MANUFACTURING PROCESS

1 Combines the work of two machines, i.e.: Rotary and Slotting machines.

2. It more efficient than the alternative manufacturing process in the following ways:

A. Space required by two machines is obviously more than space required by

one machine.

B. Work of two machines is combined so the inventory space for both the

machines is reduced. So, space is further saved.

C. Electricity consumption in one machine is less than the electricity consumed

by two machines.

D. In DIE-CUTTING machine 2 skilled labour and 2 helpers are required; where

as in Rotary and Slotting machine 1 skilled labour 2 helpers are required on

each machine. Cost of one skilled labour is Rs. 6,500, cost of semi-skilled

labour is Rs. 5,000 and cost of a helper is Rs. 3,500. So, the cost of labour

required in DIE-CUTTING machine is Rs. 20,000 but, the overall cost of

labour expended in both the machine is Rs.27, 000. The difference between

expenditure in labour is Rs. 7,000, i.e. cost of 2 helpers is eliminated.

3. Quality check is administered at just one stage if we use DIE-CUTTER but, in

Rotary and Slotting quality is administered in both stages.

MANUFACTURING PROCESS IN DETAIL:

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The Corrugation Machine:

Description

a. Space Requirement (area) : 24 fts X 6 fts.

b. Cost : Cost of Corrugation Machine ranges between Rs.12 lakh.

c. Manpower : 1 skilled, 2 helpers.

Working:

i) Types of Papers Used:

1. Kraft Paper:

These are classified according to weight, i.e. in grams. Various types of

classifications are 230gsm, 180gsm, 140gsm, 120gsm, 100 gsm. Which are

further categorized into 16bf, 18bf, 20bf, 22bf, 25bf, 25bf.

2. Semi- Kraft Paper:

These are classified according to weight, i.e. in grams. Various types of

classifications are 230gsm, 180gsm, 140gsm, 120gsm, 100 gsm. Which are

further categorized into 16bf, 18bf, 20bf, 22bf, 25bf, 25bf .

3. Duplex :

Duplex paper is paper or cover stock, usually made by laminating two sheets of

paper. Each side is different. Duplex paper may be a different color on each side,

have a different finish on each side, or different textures.

Also Known As: double-faced, two-tone, double-sided, and different-sided

ii) The Manufacturing:

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Two paper reels are set in the machine of the desired breadth. Generally the size made is

between 22inches and 65inches. The corrugating machine can work on both electricity as

well as with on Liquefied Petroleum Gas with 1440 Rotation per Minute. When working

on electricity it requires between 300 to 400 volts of electricity power depending upon

the size of the machine i.e. 32inches, 42inches, 46 inches, 52inches and 65inches

The Paper Cutting machine:

After the corrugated papers are manufactured, they are taken for cutting. The corrugated

papers so manufactured are cut according to the specifications of the length and breadth

provided by customer.

There are two types of paper cutters:

a. Manual paper cutter.

b. Electronic paper cutter: Electronic paper cutter is attached with the corrugation

machine.

Labour Required: 1 skilled labour in Manual Cutter

In Electronic cutter no extra labour is required rather than the one who work on

Corrugators.

Sheet Pasting Machine:

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Hand fed sheet pasting machine is useful for gluing fluted side of board for making 3, 5

ply corrugated board.

Size 65"

Output per

minute60 Mtrs

Motor H.P. 2

Labour Required:

1 Skilled, 2 Semi-skilled, 1Helper

Die Cutting Machine

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Die Cutting Machine or Platen Punching & Creasing Press particularly designed for

Die Cutting, Scoring and Creasing Work on PAPER, LINOLEUM, CARD-BOARD,

CORRUGATED BOARD, FIREBOARD, CORK, LEATHER, PLASTIC AND PVC

MATERIALS etc

This machine combines two works Rotary and slotting together. The specification

about the product is feeded into the machine and it consists a set of several of blades

and pressing bars. This blades and pressing bar press the corrugated board to form

creases and cuts.

This machine requires 2 Skilled and 2 helpers.

Inside

Chase Size23"x33" 25"x37" 29"x40" 32"x42" 37"x51" 42"x62"

Platen Size 25"x35" 28"x40" 32"x43" 35"x45" 40"x54" 45"x65"

H.P. 3 5 5 7.5 10 10

Impressions

per Hour1700 1500 1400 1300 1100 1000

Weight

Approx.MT3.4 4 4.5 5.4 6.5 9.5

Box Stitching Machine

 This Machine is used for last and final operation in box making. Parts are standardized

and interchangeable. Machine is capable of continuously running at high speed. Design

of the Machine is universal & world famous. Very easy in operation, servicing &

repairing.

This machine requires just 1 skilled labour and 2 helpers.

G. PRODUCTION SCHEDULE:

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The production schedule is 8 hours per day, manufacturing 4,000 boxes per day in first

year but having production capacity of 7,000 boxes per day.

Production Schedule depends on the number of units we have to manufacture. This is

estimated on the basis of customer’s contract.

Our manufacturing capacity is 7000 boxes but we are working at 50% of our capacity and

manufacturing 4000 boxes per day and we will reach our 90% efficiency in 5 years.

The manufactured corrugated boxes are sold to the customers as per the customer’s

requirement.

H. PLANT DETAILS:

1. LAND:

(i) Total Plant Size

Built up area 10,500sq.ft.

Office 150sq.ft.

Factory 6800 sq. ft.

Free Area + Store Room2000sq. ft. + 1300 sq.

ft.

Guard room and washroom 150sq.ft+100sq.ft

Total Cost of Land + Building

( 60,00,000 + 10,00,000 )70,00,000

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2. PLANT LOCATION:

Selection of a district or a particular city for a project has an imperial effect on fixed and

operational costs. The proposed location should be located near the industrial areas as this

would reduce the transport cost.

Plant will be located in Kasna. It is place near Greater Noida.

JUSTIFICATION FOR SELECTING THE PLANT LOCATION:

Kasna has been taken up as the area for plant location because of the following reasons:

a. The land rates are comparatively cheaper than other land available.

b. It is an industrial belt. Majority of the small-sector manufacturing units are located

there.

c. Waste material disposal is easy there. This is due to the fact that waste material, i.e.

left out papers that come out on die-cutting, purchasers have their recycling plant

within the radius of 3 kms.

d. Raw-materials are purchased from Noida and other nearby sources.

e. Transportation expenses are low there as Kasna is a newly developing industrial belt

and that too more for small business. So, there is competition amongst the service

providers to acquire more customers. So, due competitive pricing, the rates of

transportation are comparatively low.

f. Cheap labour is also available there.

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3. PLANT LAYOUT DESIGN:

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ENTRANCE

OFFICE

DIE CUTTING MACHINE

CORRUGATION MACHINE

STAPLING MACHINE

PASTING MACHINE

PLANT

ENTRANCE

FREE AREA (for Open Space for Sun-Drying and

other relevant works)

AND STORE ROOM

G. R.

R. R.

Room temperatures are maintained in the plant. So, that boxes don’t lose their strength

due absorption of moisture.

I. Availability of Raw Material

All raw materials are available in the local market. There are many traders in Noida as:

a. Modi Nagar Paper Mill – Modi Nagar.

b. Janki News Print Ltd. – Meerut.

c. Shivam Paper Mill Pvt. Ltd. – Panipat.

d. Mahalaxmi Craft and Tissue Pvt. Ltd. – Muzzafarnagar.

e. Ashoka Paper Mill – Jawahar Nagar, Delhi.

All these raw material providers are located in the areas like Greater Noida, Noida,

Surajpur, Ghaziabad etc.

J. LABOUR REQUIREMENTS:

Sl.No. Designation No. Salary

(Rs.)

Per

Annum(Rs.)

1 Supervisor 1 10,000 1,20,000

2 Accountant 1 12,000 1,44,000

3Peon cum

Watchman1 5,000 60,000

  Total 3,24,000

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Sno. Labour & Operator Skilled Semi-

Skilled

Helper

1. Corrugation Machine 01 - 02

2. Board Cutter - - 01

3. Sheet Pasting

Machine

01 02 01

4. Rotary Machine 01 - 02

5. Slotter 01 - 02

6. Die-Machine 02 - 02

7. Stitching 01 - 02

8. Bundling and

Dispatching

- - 05

TOTAL 05 02 13

(Labour requirements in GREEN colour are not required in our project as we confer

to DIE-CUTTING process)

Labour Wages

Sl.No. Types of

Labour

No. Salary Per-

Month

Per

18

(Rs.) Annum(Rs.)

1 Skilled 05 6,500 3,90,000

2 Semi-

Skilled02 5,000 1,20,000

3 Helper 13 3,500 5,46,000

  Total 10,56,000

K. Waste Material Disposal:

Wastage is a common feature for corrugated packages business. It is estimated that 4% of

the total production goes into waste. But as the wastage occurs during the production

process, it is generally charged to the client. The wastage on the other hand is sold as

scrap by the manufacturer at the rate of Rs.6.00 to Rs. 7.00 per kg.

L. Power and Fuel Requirements:

The overall power requirement of the plant on monthly basis.

S. NO. MODES OF

POWER

SUPPLY

QTY USED RATE PER

UNIT

AMOUNT(approx)

1. POWER 5000 unit Rs. 5.00 Rs. 25,000

2. L.P.G Cylinder 25 Cylinders Rs. 1200 Rs. 30,000

3. DIESEL 132 Ltr. Rs. 38.00 Rs 5,000

TOTAL Rs. 60,000

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M. Production Cost of the Product:

Size 1 Size 2 Size 3 Size 4

10*10*8 22*15*10 16*16*16 20*20*10

3-ply 5-ply 5-ply 5-ply

Cost Price:

Rs.5.40

Rs.15.3 Rs. 16.86 Rs.20.3

Sales Price:

Rs.9.10

Rs.24 Rs. 26.3 Rs.31.5

BOARD SIZE CALCULATION:

LENGTH OF THE BOX = 16”.

WIDTH OF THE BOX = 16”

HEIGHT OF THE BOX = 16”.

PAPER GSM= 100 * 100 * 100 * 100 * 100.

LENGTH OF THE BOARD = LENGTH + WIDTH + LENGTH + WIDTH + STICHING MARGIN.

= 16’’ + 16’’ + 16’’ + 16’’ + 2’’ = 66’’.

WIDTH OF THE BOARD = WIDTH + HEIGHT + SPARE MARGIN.

= 16’’ + 16’’ + 1’’

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= 33”.

PRICE CALCULATION:

PRICE OF THE BOX = 66 * 33 * 600 1550

= 0.8430 * Rs. 20/kg = Rs. 16.86.

THIS IS ONLY THE PAPER COST.

TOTAL COST =Rs. 16.86 + 8.43 (50% of paper cost – conversion cost *) + 01.00 (transportation cost Re. 1/box) Rs. 26.29

TOTAL COST OF THE BOX IS Rs. 26.30 only.

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(TAXES / VAT EXTRA AS APPLICABLE:INTERSTATE – 2%, WITHIN STATE – AS APPLICABLE)

[* = 12% Profit, 4% Electricity Charges, 3% Gum, 4% Stitching Wire Cost, 4% Wastage, 3% Stores and Maintenance, 8% Salary and Wages, 3% Misc. Expenses, 4% Printing Charges, 3% Sales and Promotion, 3% Interest on Working Capital. ]

III. MARKET FEASIBILITY

A. The Market Description:

The highly fragmented packaging industry is estimated at Rs 8,000 crore.

The industry is growing at the rate of 22-25 per cent per annum according to Pack

Plus.

In the next five years, the sector is expected to triple to around $ 60 bn.

More than 80 percent of the total packaging in India constitutes rigid packaging.

The remaining 20 percent comprises flexible packaging.

The total demand for paper is estimated to be around 6 mn tones, of which about

40 percent is consumed by the packaging industry.

There are about 600-700 packaging machinery manufacturers, 95percent of which

are in the small and medium sector located all over India.

India's per capita packaging consumption is less than $ 15 against worldwide

average of nearly $ 100.

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B. Methods of Transportation:

Transportation takes place in two aspects: Carriage inwards and Carriage Outwards.

a. Carriage Inwards:

Carriage inwards is indirect cost incurred by us, i.e.: the transportation cost spent in

getting the raw materials into the factory premises. Ex: Printed Paper.

b. Carriage Outwards:

Carriage outwards are selling and distribution expenses. These are such expenses that

are incurred on the finished goods; i.e.: when the finished cartons are sent to the final

customer for final consumption. This expense is generally 6% of the amount that will

be received on the completion of contract.

C. Existing Rates of Transport:

The existing rates of transportation are as follows:

6% of the cost of 1 corrugated box is been given to the transporter.

For example: if 7000 boxes are being dispatched and 1 5ply box costs Rs. 31.50 then

Rs. 13,230 will be paid to the transporter.

D. Channels of Distribution:

Channels of distribution means, the number of intermediaries that the product passes

through before reaching the final consumer. We have taken in this zero level of

distribution; i.e.: we are in direct contact with the final consumer. We deal with the

consumer directly; we take orders of corrugated boxes as per the specification

provided by the final consumers. We enter into direct contract with the final

consumers on a fixed price.

E. Analysis of Past and Present Demand:

The average number of single facers per company has increased from 1.2 to 2.69.

Average production per day per single facer has increased from 1387 to 2724.

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F. Quantity Value of Consumption:

The raw materials are purchased on daily basis and the products so manufactured are

sold to the customers on daily basis.

Lot size depends upon the quantity demanded by the customer’s.

G. Major Consumers of Product

A list of major industries, in which it is extensively used at present , is being given

below:

A. Breweries

B. Glass-wares

C. Cigarettes

D. Pharmaceuticals

E. Soap & cosmetics

F. Milk & milk products

G. Biscuits

H. Tea & coffee

I. Hosiery & footwear

J. Toys

K. Photographic Equipments

L. Textiles & ready-made garments

M. Electric goods

N. Electric bulbs

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O. Hardware

P. Bicycle & auto parts

Q. Rubber and rubber products

R. Stationery

S. Matches

T. Defense

U. Food Preservation

V. Cashew Nut Industry

W. Synthetic (Man-Made) Industry

X. Horticulture products, tobacco

Y. Apple, Cherry, Grapes etc.

H. Analysis of Past and Present Supply

The consumption of 3 and 5 ply boxes is increasing at a growth rate of 12% to

15% per year.

A significant growth in consumption of paper above 150 GSM.

A significant growth in consumption of paper above 20 BF. We see more and

more consumption of 20BF, 22BF, 28BF in the recent trends.

I. Competitive Position of the Product

Freshness - While consumers want convenience, they also want freshness.

Modified

Atmosphere Packaging - that preserves shelf life and maintains freshness.

Tamper Evidence - The demand for tamper evident packaging will increase.

Labeling - The demands on labels to provide.

Paper Strength- We use 22BF paper. It has the highest demand in the market.

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