Pre-Feasibility StudyPET BOTTLES MANUFACTURING UNIT Small and Medium Enterprise Development Authority Government of Pakistan www.smeda.org.pk HEAD OFFICE 6th Floor ,LDA Plaza , Egerton Road , Lahore 54000, Pkaistan Tel: (042) 111-111-456, Fax: (042) 6304926-7
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[email protected] May, 2010 Pre-Feasibility Study PET Bottles Manufacturing Unit DISCLAIMER The purpose and scope of this information memorandum is to introduce the subject matter and provide a general idea and information on the said area. All the material included in this document is based on data/information gathered from various sources and is based on certain assumptions. Although, due care and diligence has been taken to compile this document, the contained information may vary due to any change in any of the concerned factors, and the actual results may differ substantially from the presented information. SMEDA does not assume any liability for any financial or other loss resulting from this memorandum in consequence of undertaking this activity. Therefore, the content of this memorandum should not be relied upon for making any decision, investment or otherwise. 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DOCUMENT CONTROL Document No. Revision Prepared by Approved by Issue Date Issued by PREF-37 2 SMEDA-Punjab GM Punjab May, 2010 Library Officer PREF-37/May, 2010/2 ...................................................................................................................................... 2010/2 ..........................4 Workshop Machines ................3 Proposed Capacity...................................................................14 11...................................................1 2 Introduction ....................Pre-Feasibility Study PET Bottles Manufacturing Unit TABLE OF CONTENTS Table of Contents ......................2 2.....8 6...................................................................................................2 2.................................................................4 Total Project Cost...........................................................................................................................1.................1...............................................8 7..........................................................................................................................11 8 Human RESOURCE Requirement ...............................................................................1 Injection Molding...............................................13 11..1 Injection molding machines ......................6 6 Machinery Requirement................................................11 9 Land & building ..............................8 7.......................1 Project Brief .....8 7.........................................................1................4 4.....................................................................................................................................................................................................................................2 Project Rationale .....18 PREF-37/May.......5 5.............................1 One-Step Process .... Chiller unit .....6 5......................................................3 Cooling tower.....................................2 Projected Balance Sheet......................................................................................3 3 Current Industry Structure ..................................8 6..................................2 Two-Step Process....................................................................................................................13 11...........................15 12 Key Assumptions...............................1...........................................................................................................................3 2...........................................................................................................................................3 1 Executive summary.................1 Production Mix ..............................2 2....................................................................................................................1 Projected Income Statement....................................................................8 6............................3 Production Capacity of the Project ......4 Starting Production Capacity ...............................................1 Manufacturing Stages.............................10 7.2 Compressor ......................................1 Injection Molding Capacity Details ...................................................................................................................................11 10 Project Economics......................................................3 Projected Cash Flow Statement ....................................................................2 Injection Molding Process Details ....10 7..................................................................................2 Stretch Blow Process...........3 4 Products Offered ..............................6 5.12 11 financial analysis ............................................................16 13 ANNEXTURE ................................................................9 7.....................................................................................................7 6...4 5 Production Process................................................................................8 7 Production................................................................................................... 72 million is required as working capital. 16. all the calculations have been based on 5.57% as compared to 0.5 litter bottles its percentage in the product mix is high 65. recyclable. In this pre-feasibility study. in which. safe. and PET has been extensively tested for safety.27 million bottles per year needs a capital investment estimated at Rs.97 million for construction and purchasing machinery & equipment. etc. Bottles made with PET are widely used for everything from water and fruit juice to soft drinks etc.27 million bottles of three different sizes 0. Projected IRR. PET resin has superior properties i.149 and 4. In addition to this. 2010/2 . no leakage.64% respectively. PET has become the material of choice for bottled beverages because it is lightweight and shatter resistant.5 and 5. 2.221. and today’s convenience-size bottles are an increasingly popular choice for busy people everywhere. Plastic make possible an array of opportunities for transporting. Every day. design flexibility. 10. an estimated sum of Rs.69 million.Pre-Feasibility Study PET Bottles Manufacturing Unit 1 EXECUTIVE SUMMARY The PET Bottles Manufacturing unit is a project of Plastic Sector.5 & 5 litter bottles.5. 1 PREF-37/May. The total project cost is estimated at Rs.79% and 1.32 years respectively. million of consumers rely on the safety and ease of plastic bottles to help to preserve the quality and freshness of what we drink and serve our families. Net Present Value (NPV) and Payback of this project are 38%. the most convenience-size bottles are made from Polyethylene Terephthalate. storing and serving our favorite beverages. pure. Due to high demand of 1. 1.e. good barrier. attractive. Rs.0 litter bottles which are 32. 13. A PET Bottles Manufacturing Unit with a capacity of 5. 1 The objective of this pre-feasibility study is to provide information for setting up a PET bottles manufacturing unit. Their high impact and tensile strength makes them ideal for carbonated products. The PET resin has superior properties. and have a lower cost than the bottles made from glass and other materials. The demand of PET bottles is on a rise as most of the food manufactures from different businesses are converting to PET bottles for the packaging of their products. food and non-food industry are shifting towards PET bottles. made up of Polyethylene Terephthalate (PET). and because the material in the wall is thinner. PET bottles reduce shipping costs. ♦ Safe: PET bottles are tough and virtually unbreakable.1 Project Brief PET bottles are a packaging medium. carbon dioxide and water means that it protects and maintains the integrity of products giving a good shelf life. not shatter. PVE stands for Poly Vinyl Ethylene 2 PREF-37/May. HDPE stands for High Density Polyethylene. The PET bottles/containers are commonly used for the packaging of the following: • • • • • • • • Mineral Water Carbonated Beverages Edible Oil Household Food Containers Detergents Paints Lubricating Oils Feeding Bottles for Babies As PET bottles provide better packaging. If they do fail. different businesses in beverage.Pre-Feasibility Study PET Bottles Manufacturing Unit 2 INTRODUCTION 2. ♦ Lightweight: One tenth the weight of an equivalent glass pack. due to their several advantages over other resins like PE. shelf utilization is 1 PE stands for Polyethylene. PET also has good chemical resistance. Proposed location for this project is Lahore. 2010/2 . HDPE and PVE. ♦ Pure: Products taste good as PET complies with international food contact regulations.2 Project Rationale PET bottles are used as packaging in a variety of products. which are as follows: ♦ Attractive: Products look good. 2. pure and healthy because of attractiveness of PET bottles. they split. These are widely used in food grade packaging and are the preferred packaging medium in this segment. ♦ Good barrier: The low permeability of PET to oxygen. ♦ Recyclable: Used PET bottles can be washed. carpeting. etc. The domestic manufacturing of plastic products is growing at 10-15 percent annually. edible oil and mineral water industries are good examples for the increasing demand of PET bottles. PET is made from the same three elements (carbon.27 million bottles per year. Specially designed thick-wall bottles can be washed. 2. High strength.Pre-Feasibility Study PET Bottles Manufacturing Unit improved by 25% on volume compared to glass. Plast (Pvt. In the US. granulated into flakes and reshaped as PET bottles or employed as material for strapping. 2.69 million having a Capital Investment of Rs. 10. and hydrogen) as paper. new industries are shifting to PET bottling because of lower cost and better preservation of their product. Being recyclable is the most important factor of success of business of PET bottles.72 million. When burned. 3 PREF-37/May. and in many European and Latin American countries. refilled and reused. 2010/2 . Al Quresh Bottles etc. These units manufacture variety of products. There are around 35 small and medium units working in Lahore including Mega Plast. 3 CURRENT INDUSTRY STRUCTURE Majority of the businesses in Pakistan are converting from the bottle containers of traditional material to plastic substitutes for packaging of their products. With every passing day. leaving no toxic residues.000.000 pounds of PET bottles are recycled annually. The absence of a weld line in the base means that PET bottles have no leakage.4 Total Project Cost The cost of the project is estimated at Rs 13.3 Proposed Capacity The production capacity of the proposed project is estimated at 5. Businesses from different fields are shifting from conventional packaging to PET bottles. more than 600. fiber filling. sizes. 2. It consumes less energy and produces less pollution than glass or metal packaging. The major players of the industry are Gatron and Five Star Industries. it produces carbon dioxide gas and water. Plas Pack. ♦ Design flexibility: PET bottles are suitable for containers of all shapes. ranging from bottles for mineral water to packaging for pesticides. Because of the high demand of PET bottles.) Ltd. Carbonated beverage. Within five years. as majority of the players in these industries have shifted to PET bottles. there has been an increase in small manufacturing units of PET bottles in the main cities of Pakistan. S. PET is completely recyclable material. PET bottles are designed to be refilled and used over and over again. ♦ No leakage: Absolute closure integrity is possible because of the injection molded neck finish. Uni Plast International.K. low weight PET bottles can be stacked as high as glass. and contains no toxic substances. neck finish designs and colors. the share of PET bottles has grown from 2-3 percent to 18-20 percent in the carbonated beverage market.97 million and Working Capital provision of Rs. oxygen. Pre-Feasibility Study PET Bottles Manufacturing Unit 4 PRODUCTS OFFERED The proposed project will be capable of making PET bottles of different sizes.57% 1. Table 4-2 Production Mix Description 0. the production of 0. The size of bottles will depend on customer specifications. The production of 1.79 % 65. 2010/2 2 .5.5 and 5 liter. 4 PREF-37/May. as they are used in the beverage and mineral water industries which are the two largest consumers of PET bottles. 4.5 Liters PET Bottles 1. 1.5 Liter bottle 5 Liter bottle Production Ratio2 32.5 Liters PET Bottles 5 Liters PET Bottles The target customers of Pet bottle are Mineral Water. Table 4-1 Details of Product Mix Product Offered 0.1 Production Mix Keeping in view the demand of the product mix the proposed production is divided into the below proportion. Commonly manufactured sizes shall be 0.64% 100% Production ratios have been calculated from the capacities of the machinery and are explained in the following pages.5 Liter bottle 1. The production of 5 liter is lower then the other two because they are mostly used in edible oil packaging. Beverages and Edible oil industries.5 liter bottles is also increasing because of the increase of usage in mineral water bottles. Along with this.5-liter bottles is the highest. 2010/2 . lightweight container. This must be removed before processing using a dehumidifying drier. Stretch blow molding the container. Container ejection The finished container is ejected. Opitimizing the Preform Temperature The temperature of the preform is adjusted to the correct profile for blowing. Injection molding the Preform Molten PET is injected into an injection cavity and cooled rapidly to form a "Preform". from which bottles are blown is know as a Preform). orienting the crystals of and strengthening the PET) into a shaped blow mold to form a tough. 5 PREF-37/May.Pre-Feasibility Study PET Bottles Manufacturing Unit 5 PRODUCTION PROCESS Process Flow Diagram of PET Bottles Manufacturing Drying the PET PET absorbs moisture from the atmosphere. The hot Preform is simultaneously stretched and blown (thereby. Figure 5-1 Plasticizing the PET Dried PET Pellets are compressed and melted by a rotating injection Screw. (The Original test-tube-like form. 1 Manufacturing Stages Bottles can be made through two types of processes. 2. Melting of resin and injection into mold c. process involves: a. Bottle ejection 5. Bottles free from scruff marks. 4. Higher operating efficiency because of separate injection and blow molding function. Bottle stretch blow molding e. Pre-form manufacturing process consists of following steps: a. 7. Lower initial investment. 2010/2 . Highly oval or rectangular cross-sectioned containers. Both the pre-form manufacturing and stretch blow molding is performed on a single line. The pre-forms are produced earlier and stored. Buying pre-forms instead of making them can save money. Same number of injection cavities and blow molds as on conventional machine. Bottle Stretch Blow Molding. Transfer of heated pre-forms to blow wheel d. Two-step process 5. 6. Pre-form heating c. Main features of two-step production process are as follows: 1. as pre-form wall is thicker to retain heat where stretching is required. Resin drying and dehumidification b. Injection blow molding d. Lesser Power consumption. Primary cooling e. and the next.2 Two-Step Process In a two-step process. Ejection and storage 2. Higher initial investment. Better thermal efficiency because the residual heat in the pre-forms from the injection molding process is used for blowing. 2. the production of bottle. 3. 1. PET bottles are made in two discrete steps.Pre-Feasibility Study PET Bottles Manufacturing Unit PET bottles manufacturing process involves two basic stages of Pre-form manufacturing and Bottle Stretch Blow Molding.1. One-step process 2. Different pre-form designs. The first step involves making the pre-form. the PET bottles are made directly from the resin.1 One-Step Process In a one-step process. 6 PREF-37/May. 1. as performs are not re-gripped before blowing. and stretch blow molding is done as and when required. Main features of the one step process are as follows: 1. Secondary cooling f. Pre-form feeding b. 5.1. 5. 4.000 100.000 595. In case if unit doesn't place in industrial grid area then generator is required 7 PREF-37/May.5 ft.000 295.000 170.000 450.000 350.000 595. 5.000 100. Higher inventory of pre-forms. Thermal efficiency lower since the pre-forms are first cooled to the room temperature for storage purposes and then re-heated to suitable blowing temperature. Better adaptability to fluctuation in demand.000 170. industrial grids provide consistent electric supply to industrial units.000 595. More suitable for high volume production of less technically demanding containers such as carbonated soft drink bottles.000 100.000 168.000 Total Cost (Rs.Pre-Feasibility Study PET Bottles Manufacturing Unit 3. 6 MACHINERY REQUIREMENT Cost 500.000 100.000 150. Higher flexibility.000 250. as they are frequently scuffed before blowing. 7.000 200. Thinner pre-form walls.) 500. 11. Degree of ovality restricted owing to the difficult of temperature profiling of the pre-forms.000 168.000 350.000 250.000 200. 8.000 150. refurbished 1 Lathe 5.000 250.000 192.000 250. 9. 6. Different cycle times of the two separate machines. 10.000 450.000 295. as pre-forms can be stockpiled. 2010/2 3 .000 Machinery Requirement Unit Injection Molding Machine I 1 Injection Molding Machine II 1 Blow Molding Machine I 1 Blow Molding Machine II 1 Compressor 1 Cooling Tower 1 Chiller Unit 1 Lathe 8 ft. so the outputs are matched by increasing the number of injection cavities.000 595. Care must be taken in controlling storage conditions to ensure consistent aging and moisture absorption of different pre-form batches.000 192. with 1 pump Facer 1 Shaper 26 inch 1 Die Molds Production Shells Generator (50 KWH) Made in 1 3 China Total Cost Table 6-1 As per prevailing policy. Centralized pre-form production facility can be created to supply several blow molders.365. 1 Pillar Drill 26 inches.000 4. so that it heats up faster where stretching is required. as bottle makers can make or buy pre-forms. JSW. which can take up to 4 months. 6.1 Injection Molding 7. Nessei. Meiki.1 Injection Molding Capacity Details A JSW Series 70-ton machine is available in the injection capacities of 111 grams. the machine with injection capacity of 111 grams has been used.3 Cooling tower. 2010/2 . 6. Hayabusa. Usually. The machinery delivery time is 15-20 days if it is available off-the-shelf. It will supply compressed air to the blow-molding machine. facer and shaper are required for the workshop. it will be able to make a shot size of 78 grams (111 grams X 70%) 0.Pre-Feasibility Study PET Bottles Manufacturing Unit 6. This means that for the 111 grams machine. 8 PREF-37/May. the injection molding machine with total barrel capacity of 111 grams will be used for the production of pre-forms of 0. it is recommended that a factor of 70% be used to determine the shot size as a percentage of total barrel capacity. 6.1 Injection molding machines Injection molding machines of two different sizes are required as the proposed production mix depends upon different sizes. All the machines required for the workshop are manufactured locally. but not for its electrical parts and components. then it has to be imported. 145 grams or 192 grams. Senki. depending upon the availability.5 liter bottles only. 7 PRODUCTION For the purpose of this project. For the purpose of this pre-feasibility study. but if not. Toshiba.5 –liter bottle weighs roughly 15 grams.5 liters and 5 liter bottles in the ratio of 80:20. 7. The other injection-molding machine will be used for the production of pre-forms of 1.4 Workshop Machines Lathe machines.2 Compressor The compressor will be used with the stretch blow machine. For PET. so the 111 gram machine will be able to make maximum of 4 pre-forms. Net Star.1. Chiller unit The cooling tower is required to generate cooling water for cooling the compressors. The stretch blow molding machines are also being manufactured locally. This machine with high barrel capacity will enable the business to make 19 liter bottles at a later stage. pillar drill. there is a guarantee of 6 months from the date of installation for the machinery. The refurbished injection molding machines of the following brands are available in the market: Kawaguchi. the higher will be the clamping force required. Using the 70% recommended factor. Hence the 537-gram machine will be able to make a maximum of 1 pre-form in one stroke. under pressure. The number of pre-forms made depends upon the mold/die and the number of cavities. into the mold where it conforms to the shape of the cavity.5-liter Bottle weighs roughly 33 grams. The higher the number of cavities in a mold. Both injection-molding machines take 18-20 seconds to complete one stroke. 2010/2 . The clamp is sized by the "Tonnage" it holds.5 liter bottle.1. 175 ton machine comes in Shot Weights of 302 grams or 373 grams or 537 grams. The injection molding machine making pre-forms for 5-liter bottle is the same as the one making pre-form for 1. depending upon the make and the model.5 and 5-liter PET bottles (Kawaguchi Series). Once the part is cooled. An injection-molding machine usually takes 18-20 seconds. The mold is clamped shut while the material is being injected in to the cavity since the cavity pressure may be as high as 5.Pre-Feasibility Study PET Bottles Manufacturing Unit Second machine will be used for the production of 1. The raw material (PET bottles grade resin) is placed in the hopper of an injection-molding machine where it is fed into a chamber for melting. For the purpose of this study. The details of production capacity for the injection molding machines are given in below table: 4 pounds per square inch 9 PREF-37/May. Once melted. but the production of the 5 liter bottles will be less. Hence the 537-gram machine will be able to make a maximum of 10 pre-forms in one stroke. the machine of 537 grams has been used. usually by circulating temperature-controlled water through it. the mold is opened and the part removed. Melting is done by conducting heat into the material in a "Plunger" machine. The mold is then closed and ready for the next shot. this machine will be able to make a shot size of 376 grams (537 grams X 70%) A 1. while the material is primarily heated by shearing or mechanically working the material in a "Screw" machine. Several shots of material are heated and held in the injection unit. the material is forced. A 5-liter Bottle weighs roughly 340 grams.2 Injection Molding Process Details The primary role of the injection-molding machine is to develop performs. The mold is temperature controlled. 7. to complete one stroke.000 psi4. 2 Stretch Blow Process The stretch blow-molding machine has a capacity of handling about 360 pre-forms in an hour using one shell.5 liter and 5 liter bottles can be worked out.000 3. Similarly.5 liters bottles is 18.5 liters bottles that can be obtained from the unit is 5.456. Table 7-2 Production Capacity Stretch Blow Molding Machine Time Required Hourly Installed (Sec)/Stroke5 Production Capacity/Day 11 2. 10 PREF-37/May. the time of stretch blow molding along with ejection is about 17 seconds.5 Liters PET bottle 1. The stretch blow-molding machine blows a bottle of 1./ Day 5.Pre-Feasibility Study PET Bottles Manufacturing Unit Table 7-1 Production 0. Table 7-5 summarizes the production capacities of the three sizes of PET bottles being recommended in this pre-feasibility study.5 liter bottles is 5.018 17 1.574 59 409 3.018. The stretch blow-molding machine has a conveyor.440 100% 80% 20% 5.760 and the capacity of stretch blow molding machine for 0.5 Liters PET bottle 5 Liters PET bottles Total Production Capacity of Injection Molding Machine Per Stroke Production 4 10 1 Stroke per minute 3 3 3 Produ Installed Share in ct Mix cap/day Production Cap.5 Liter 1.270. so the maximum production of 0. As the maximum capacity of injection molding machine for 0.5 Liter 5 Liter 7.728. By incorporating the operator handling time.3 Production Capacity of the Project Since every bottle has to pass through both the processes of injection molding and stretch molding. which feeds pre-heated pre-forms into the stretch blow-molding machine.760 bottles. the total production capacities of the 1. 2010/2 .5-liter capacity in about 14 seconds.400 5. The pre-forms are to be manually fed into the stretch blow-molding machine by an operator.400 7. so the total production capacity of the unit will be determined by the bottleneck of the process.760 11.252 18.269 0. 5 Stretch Blow machine blows 4 bottles in one stroke.520 288 17.447 11.760 14.400 1. This means that the lower of the capacities of the two processes will be the total capacity of the unit.000 86.568 Annual Production 1. is required.000 Annual Salary in (Rs) 600.000 168.79% 65. 8 HUMAN RESOURCE REQUIREMENT Monthly Salary (Rs) 50.541.000 487.728 800 Raw Material Store 252 700 Finished goods store 510 700 Loading area 696 700 Workshop Area 855 700 Cooling Tower/Chiller 684 600 Total Construction Cost 4.000 192.000 3. Management building 100 1300 Production Area 1.000 2. ft.57% 1.304.000 8.760 18.000 288.000 86.672 11.270.400 Percentage Share in Production 32.382.400 3.269 288 Annual Installed Capacity 1.000 14.900 .000 7. 2010/2 Total in (Rs) 130.574 288 3.500 410. ft) Cost per Sq. It is recommended that the land should be bought.400 176.760 12.000 12.018 5.000 Human Resource Requirement Number of Personnel CEO 1 Production Manager 1 Accountant 1 Injection Machine Operators 2 Blow Machine Operators 2 Pre-form Handler 1 Helpers 4 Guards 2 Total 14 Table 8-1 9 LAND & BUILDING For the proposed project.950 11 PREF-37/May. ft.000 168.400 5.4 Starting Production Capacity Starting capacity utilization of this unit is 40%.5 Liter 5 Liter Total Maximum Production Capacity of Unit Stretch Maximum Injection Blow Production of Molding Molding the unit per Production Capacity day 5.000 288.000 96.574 11.000 sq.000 1.000 7. The maximum capacity level that can be achieved is 90%.000 336. an area of about 5. The details of the area required for different activities are given below: Table 9-1 Building Covered Area Requirement Description Area (sq.728.000 30.456.5 Liter 1.Pre-Feasibility Study PET Bottles Manufacturing Unit Table 7-3 Product 0.200 598.000 360.000 12.64% 100% 7.400 357. 000 81.25 17. 2010/2 .221.535 Project 38% 4.572 410.690.320 Rs.710 2.723.000 10.312.845.) Rs.32 16.365. In actuals 2.Pre-Feasibility Study PET Bottles Manufacturing Unit 10 PROJECT ECONOMICS Capital Investment Land Building/Infrastructure Machinery & equipment Furniture & fixtures Office equipment Pre-operating costs Total Capital Costs Working Capital Raw material inventory Cash Total Working Capital Total Investment Initial Financing Debt Equity Initial Financing IRR Payback Period (yrs) Net Present Value (Rs.845.889 3.160 Equity 48% 4.967.149 50% 50% 12 PREF-37/May.039 Rs.250 112.282 13. In actuals 2.945.160 6.541.000 508.900 4. In actuals 6.358. 544 16.645 13.823 2.959 Year 8 71.092.285 632.566 22.070.054 8.562.882.573 952.517.866.852 820.239 13.920 50.122 27.549 632.360 9.373.333 632.829 21.677 48.154.489.800 3.425.177 392.133 1.194 294.360 3.421.685 12.297 18.643 17.697 38.386 19.553 Year 5 47.673 25.798 2.366 5.891.122.774.024 12.180 23.141.861 494.814 Year 2 22.003 17.159.444 230.692 8.640.655 918.738 26.615 356.727 46.843 43.304.732.158 Year 7 64.995 431.847 337.116 1.172.457.225 13.370 3.133 173.961 6.858.045 40.019 632.208.631 30.920 50.789 19.605.039.120 9.1 Projected Income Statement SMEDA Rs.257.419 1.690 11.488 1.719 15.405.920 50. audit.532 632.920 50.300 494.560.800 5.337 9.027.547.085 22.188 32.) Promotional expense Insurance expense Professional fees (legal.373.800 4.437.013.806 2.800 2.938.017 3.965.357.666 2. In actuals Year 10 86.316.926.920 50.039.845 44.720 325.825.122 27.091.083.213.818.676 5.413.296.178.748.454.646 13.682 1.676 24.166.800 2.174 11.130 147.770 592.386 6.532.152.710 35.502 1.445.724.054 23.492 12.909.724 36.271 447.920 50. etc.755.806 Year 4 37.345 1.249.592.332.486 5.466.369 757.219 306.007 6.800 4.690 32.061 Year 9 78.645 4.568.634.866.876 34.291 19.841.127.408 16.592 278.296 209.249 632.459 253.122.014.391.816 19.068 111.547.122 9.767 632.896 1.) Depreciation expense Amortization expense Subtotal Operating Income Other income Earnings Before Interest & Taxes Interest expense Earnings Before Tax Taxable earnings for the year Tax NET PROFIT/(LOSS) AFTER TAX 16. etc.793.226 8.280.431.589 247.684 1.471 1.829 325.183 1.920 50.324.166 25.250.388 3.872 190.682 Statement Summaries Income Statement Year 1 Revenue Cost of goods sold Gross Profit General administration & selling expenses Administration expense Rental expense Utilities expense Office expenses (stationary.013.891 20.472.664. 2010/2 .335 1.044 632.499 20.353.645 1.433 113.859 Year 3 29.470.404 632.413.300 1.341.408.431 10.874 871.866.Pre-Feasibility Study PET Bottles Manufacturing Unit 11 FINANCIAL ANALYSIS 11.468 21.780.236.108.807.458.119 12.646 37.840 37.140 81.800 3.894 1.766 40.271 590.920 50.666 860.646 37.800 3.410 9.486 1.316.000 143.541 13.471 27.358.122.145.970 13 PREF-37/May.003 632.909.968.039.701 1.340.936 1.690 32.272.815 Year 6 58.014 324.556.316.597.029.894.899 17.800.920 50.800 4.985 1.975.084.413.347.483 1.210 3.333 189.598 1.705 30.800 2.457.920 50.184 13.332.054 23.818 30.492.739.300 1.603.718.076 238.495 14.121 12.549 5.480 1.547.130 157.506.227 27.640. 950 4.851 102.400 8.047.800 50.375 33.080 6.607 254.710 3.889 2.845.037.845.400 152.000 65.541.283.686.344.309.160 2.755.400 406.199 2.479.400 50.833.600 101.900 4.155 2.246.235 1.889 3.572 2.312.358.383 55.893 3.500 40.600 6.358.125 100.824 797.453 1.393.759 2.121 73.358.449 11.023 77.200 457.023.302.315 203.478 3.564 5.839 508.716.586.088 24.245 2.984.232.513 1. In actuals Year 10 Statement Summaries Balance Sheet Year 0 Assets Current assets Cash & Bank Accounts receivable Finished goods inventory Equipment spare part inventory Raw material inventory Total Current Assets Fixed assets Land Building/Infrastructure Machinery & equipment Furniture & fixtures Office equipment Total Fixed Assets Intangible assets Pre-operation costs Total Intangible Assets TOTAL ASSETS Liabilities & Shareholders' Equity Current liabilities Accounts payable Total Current Liabilities Other liabilities Long term debt Total Long Term Liabilities Shareholders' equity Paid-up capital Retained earnings Total Equity TOTAL CAPITAL AND LIABILITIES Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 410.176.255 4.889 3.800 304.552.160 918.347 27.978.160 48.573 11.910.679.889 3.124 71.361.171.244 12.358.845.300 53.507 31.755 4.845.480 361.664.200 4.423.000 89.375 5.330 1.406.298 6.513 - - - - - 6.208 43.000 81.500 73.000 508.039 2.930.320 6.930.800 6.845.743.080.607 6.592 8.300.600 9.763.160 6.597.936 2.845.193.320 457.586.282 1.055.656.240 6.805 3.631.845.521 319.522.368.710 2.358.202 6.160 13.659 210.841.904 5.600 355.000 254.331 93.583 3.789 6.716.804.294.500 44.247 355.257.459.358.584 2.159.153 52.160 20.176.358.936 1.000 32.631.160 66.712 812.279 2.048 40.789 406.295 3.404 19.592.845.187.723.182.439 2.845.101.597.872 3.187.863 72.554.334 2.358.800 98.907.055.492.111 6.300.746.755 3.500 8.047.648 2.661.841.833.153.889 3.982.125.206 5.619.525 253.Pre-Feasibility Study PET Bottles Manufacturing Unit 11.185.520 2.522 137.358.300.889 2.037.400 59.171.123.783 304.664.826.010.470 780.023.402.763 9.153 4.160 5.358.055.377 4.527.824 1.129.400 5.445 15.329.177.845.681 109.519.821 98.607 24.928 18.039 12.679 2.080 152.160 86.677 300.358.743.599 2.082.845.119 2.889 2.361 36.527.000 48.928.302.364.295 3.783 6.247 6.872 3.543 59.025 118.845.341.352 6.868 6.845.134 4.240 122.201 8.134 2.160 111.600 77.584 1.625 56.246.020.469.500 24.805 15.475.013 5.406.160 6.514 10.160 5.645 7.395.661 93.145.369 10.631 118.707.840.419 7.948.000 16.028.216.140 873.516.876 21.200 15.064.762.045 436.000 10.791 122.359 2.356 36.257.878.750 67.419 4.484.889 2.084.500 56.160 6.845.815.400 16.160 11.2 Projected Balance Sheet SMEDA Rs. 2010/2 .560.800 24.128 9.377 4.161.273.984.830 7.283.200 203.929 384.583 2.400 6.160 33.690.889 1.600 19.995 172.125 11.200 7.139.889 2.315 6.365.993 14 PREF-37/May.519 2.889 1.298 101.250 112.174.245 2.288 16.159.393.993 - 797.200 43.325.770.845.073 339.139.615 3.160 6.519.202 4.000 13.690.000 31.800 9.375 4.875 78.927.419 4.000 7.250 22.845.358.827.425 2.316. 696.128.800 (748.039) (10.411 14.478 36.572) (2.241 19.920 50.850.760 888.800 (812.323.800 (662.800 (1. 2010/2 .407) (21.785) (1.197) (1.572) 918.677.800 (1.924.920 50.323.496.513) (1.920 50.967.116 632.483 632.551.924.006.242) (1.684 632.661 2.206.361) (1.662) (1.128.424) (1.920 50.320 - (1.241 20.448) (22.924 15.372.405) 788.003 1.055.622 17.670) (34.552) (20.844) (18.851) (102.424) (1.920 50.208) 281.164.410.751) (957.986) 12.003 (240.920 50.117.755.845.039) 410.099 12.3 Projected Cash Flow Statement SMEDA Rs.341 8.881 3.263.797) 386.597.452.259) 1.893) (874.122 5.441) 797.970 632.263.971) 261.335 632.242) (1.676 10.452.785) (1.480 632.058) (1.331 (388.920 50.052.370 15 PREF-37/May.249.950) 450.312.800 (775.701 632.Pre-Feasibility Study PET Bottles Manufacturing Unit 11.076) 482.143 5.474) (34.710 610.800 (618.466.419 632.845.522.920 50.920 50.800 (904.663) (38.162) 535. In actuals Year 10 Statement Summaries Cash Flow Statement Year 0 Operating activities Net profit Add: depreciation expense amortization expense Deferred income tax Accounts receivable Finished good inventory Equipment inventory Raw material inventory Accounts payable Cash provided by operations Financing activities Change in long term debt Issuance of shares Cash provided by / (used for) financing activ Investing activities Capital expenditure Cash (used for) / provided by investing activ NET CASH Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 (2.967.023.312.724) (1.160 13.405.551.338 4.023.866) (42.951) (1.798 632.526 3.029.690.160 6.866.042 19.858.825.642.197) (1.592.645 632.800.153) (47.006.576 11.818.800 (680.920 50.478 24.171) (868.029.547 17.370 6.750) 542.818.824 610.884 14.827.467) (1.712 7.513) - - - - (10.217) 36.547 17.800 (859. 000 110 17.60 2.160 10% 10% 5% 30 30 30 3 16% 26. 2010/2 .Pre-Feasibility Study PET Bottles Manufacturing Unit 12 KEY ASSUMPTIONS Table 12-1: Operating Assumptions Hours operational per day Days operational per month Days operational per year Table 12-2: Production Assumptions Annual production capacity (Bottles) Capacity utilization (1st Year) Capacity growth rate (yearly) Maximum Capacity utilization First Year utilized production (Bottles) Table 12-3: Economic Assumptions Electricity growth rate Wages growth rate Machine maintenance growth rate Table 12-4: Cash Flow Assumptions Accounts Receivable cycle (in days) Accounts Payable cycle (in days) Raw material inventory (in days) Finished Goods inventory (in days) Table 12-5: Raw Material Assumptions Initial Cost /Kg (Rs) Sales Tax Freight Cost per Truck Weight per Truck (kg) Freight Cost per kg Total Raw material Cost (Rs/kg) Raw material growth rate Raw Material Inventory in store (Months) 8 25 300 5.89 130 5% 3 16 PREF-37/May.270.108.400 40% 10% 90% 2.000 9. 52 45.) Table 12-10: Product Average Sale Price Size 0.Pre-Feasibility Study PET Bottles Manufacturing Unit Table 12-6: Expense Assumptions Professional fees (audit.5 Liter 34.) Promotional Expenses Table 12-7: Depreciation Rates Depreciation Method Building & infrastructure Machinery & Equipment Furniture & Fixtures Table 12-8: Financial Assumptions Project life (Years) Debt: Equity Interest rate on long term debt Discount rate for calculation of NPV 0.) 2.5 Liter 5 Liter Weighted Average Price (Rs) Total Cost (Rs.5 Liter 15.5 Liter 1. 2010/2 .60 7.70 4.71 17 PREF-37/May.) Office Expenses (stationery.65 130 5 Liter 350.60 7.20 130 Weighted average cost of Raw material per bottle (Rs. legal etc.06 4.75 130 1.5% of Revenue 1% of total administrative costs 1% of revenue Straight Line 5% 10% 10% 10 50:50 16% 20% Table 12-9: Raw Material Consumption Per Bottle Size Weight (grams) Rate 0.39 Price (Rs) 3.92 81. entertainment. etc. Geo Plaza near Picking Hotel.A. Jinnah / Dunnolly Road.2416532
[email protected] Machinery Suppliers & Consultant: Company Name Address Phone: Fax Email Website KNC International Suit No. M. Pakistan 0092-21. Box 5801.net.pk 18 PREF-37/May.com.O. 8th Floor.Pre-Feasibility Study PET Bottles Manufacturing Unit 13 ANNEXTURE Raw Material Supplier: Company Name Address Phone: Fax Email Website Gatron Industries Liminted.com www.pk www.111-71-71-71 0092-21. P.com. 5th Floor Sharja Centre 62-Shadman Market Lahore Pakistan 0092-42-7532157-58 0092-42-7532159
[email protected] Company Name Address Phone: Fax Email Universal Resources & Traders 387 A.knc. Textile Plaza.gatronova.Karachi-74000. Gujranwala 0092-55-3840241 0092-55-3840241 urt@brain. Model Town.1. 2010/2 .