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PRODUCT PROJECT REPORT

For BBA SEM-5 Product project report on paper cup

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PRODUCT PROJECT REPORT

  1. 1. Page 1 A PRODUCT PROJECT REPORT On PAPER CUP Submitted By Krishna R. Makhesana T.Y.B.B.A. (A) Roll No. 40 Guided By Prof. Ajay Jayswal Submitted To Saurashtra University Rajkot Shri Patel Kelvani Mandal College of Technology College Road, Junagadh. Academic year 2016-2017
  2. 2. Page 2 DECLARATION I, undersigned, Krishna R. Makhesana the student of T.Y.B.B.A., Here by declared that this Project work is my own work and it has been carried out under the guidance of Prof. Ajay jayswal of Shri P.K.M. College of Technology & B.Ed. This work has not been previously submitted to any other University or institution for any examination. Place: Junagadh Date: 26th Sept, 2016 (Signature) (Krishna R. Makhesana)
  3. 3. Page 3 PREFACE Being a student of TYBBA I am extremely happy to submit this project report on small scale industry under the prescribed syllabus of Saurashtra University for particularly introducing a subject “Entrepreneurship”. Entrepreneurship is management of SSI with a view to create and develop such skill and attitude among the student in practical and professional education faculty. The goal or object of this report is to make student learn about various factors that should be a kept in mind before starting up and industry in other words, it is purely entrepreneurship development and training for establishment of SSI. The contribution of SSI is 45% in the economic growth of the country. So it becomes essential to study the management and working of SSIs as a student of management.
  4. 4. Page 4 ACKNOWLEDGEMENT It is really the matter of a great pleasure for me to undertake and presents this creative and practical work, a product project report of TYBBA on Paper cup. This report has been prepared by keep in mind various aspects relating to financial capacity of the plant which is to be an established, the fast growth and development in the field of paper cup industry. I sincerely thank Prof. Ajay jayswal for their guidance and encouragement in carrying out this project work. I would also like to express my gratitude to SSIs and all those who have assisted me during the period of my project work. Finally yet importantly, the help & support of my friends and professors have made this venture successful. Therefore, I would like to thank them all from care of my heart. - Krishna R. Makhesana
  5. 5. Page 5 INDEX Sr. No Particulars Pg. No . 1 Project At Glance 2 Owners & Promoters Bio-Data 3 Paper Cup Varieties 4 Project Location’s Justification 5 Introduction of Product 6 History of Product 7 Market Potential 8 Production Schedule 9 Financial Aspects 10 Means of Finance 11 Financial Analysis 12 Profitability of project 13 Project summary 14 Balance sheet for 5 years 15 B.E.P. statement for 5 years 16 Project Advancement and Future Planning 17 Bibliography
  6. 6. Page 6 PROJECT AT GLANCE Name of the Unit: Radhe Paper cup Address for communication: 367, GIDC-1, Dolatpara, Junagadh - 362001 Type of Unit: Small Scale Industry Name of product: Paper cup SSI Registration No.: Apply for registration Subsidy Registration No.: Apply for registration Details of the Location & Unit: 368, GIDC – 1, Dolatpara, Junagadh - 362001 Partner’s Name & Address: Krishna R. Makhesana Ta.- Junagadh Dis.- Junagadh Mo.- Denisha A. Ladani Ta.- Keshod Dis.- Junagadh Mo.-
  7. 7. Page 7 OWNERS & PROMOTERS BIO-DATA (PARTNER’S DETAILS) There are mainly two partners: A. Krishna R. Makhesana B. Denisha A. Ladani (A) Krishna R. Makhesana Name : Krishna R. Makhesana Age : 20 years Religion : Hindu Address for Communication : Financial Contribution : 50% Responsibility : Finance dept. Manager Education : undergoing BBA from Saurashtra University Share in profit : 50% (B) Denisha A. Ladani
  8. 8. Page 8 Name : Denisha A. Ladani Age : 23 years Address for communication : Financial Contribution : 50% Responsibility : Marketing Dept. Manager Education : MBA from Gujarat University Share in profit : 50%
  9. 9. Page 9 PAPER CUP VARIETIES
  10. 10. Page 10 PROJECT LOCATION’S JUSTIFICATION Location is the prime factor which has to be considering for starting a new business. The location should be decided by considering all factors and making independent analysis of each variable separately through cost benefit analysis and the location should either be near to the market (i.e. customers) or where the raw material is easily available in adequate quantity.  Availability of raw material : The raw material is an important and initial part of Production process. It should be easily available at reasonable price and time because it is first step of production process for any industry. In case of this industry the basic raw material is paper which are available from nearby districts. Our Raw material supplier is Luxurious Paper Products, Metoda GIDC, Rajkot.  Labour resources: Labour resources are the second important thing for any industry for effectively running and achieve maximum production. Labour should be available at least cost. In this case 1 sales cum production manager, 1 skilled and 1 unskilled labour required which is available from nearby area.
  11. 11. Page 11  Electricity supply: The continuous electricity supply is very important for manufacturing process of this unit to run the machines. And due to residential area the electricity company provides electricity continuous and at a current rate.  Transportation facilities: Transport the raw material and finished products from one place to another place each industry should required of good transport facility. There are many transport companies situated in nearby area.  Market facilities: The demand of paper cup is increasing at a very high rate because it is easy to use, hygienic and eco-friendly. As paper cups are a product of daily consumption and necessity, their marketing will not be a problem as the consumers are aware of the advantages of using paper cups. The raw materials are indigenously available and the manufacturing process is also simple. Paper Cup find potential market in IT companies, Educational Institutions Canteens, Industrial Canteens, Restaurants, Fast Foods, Catering People, Tea Shops, Paper Product Dealers and Super Markets.
  12. 12. Page 12  Miscellaneous Factors: We have selected our location on the basis of following factors. a) Availability of infrastructural facility. b) Availability of Banks or financial institution. c) Availability of bodies such as Hospitals, dispensaries, post office, etc… enjoyed by the communities.
  13. 13. Page 13 Location  Registered office: 367, GIDC-1, Dolatpara, Junagadh - 362001  Production Location: “RADHE PAPER CUP” 368, GIDC – 1, Dolatpara, Junagadh - 362001
  14. 14. Page 14 INTRODUCTION OF PRODUCT A paper cup is a disposable made out of paper and after lined with plastic or wax prevent liquid from leakage out or soaking by paper. Paper cups are made from renewable resources. The cups should be made from food grade paper which is hygienic in nature. It is capable for holding both hot & cold liquid for longer time. The uses of paper cups have wide range. Give the rapid changes in life style; it is the right time to enter the consumer segment to popularize the home consumption of paper cups. There are several inherent advantages in using Paper Cups as compared to cups of other materials. These Paper Cups are gaining popularity all across the globe as a beautiful and stylish way of minimizing exposure to food borne infections. Paper Cups have numerous advantages like; they are manufactured in a very simple process using Food Grade Raw Materials with least waste and are easiest to recycle. They are ideal for individual servings at all kinds of parties, functions, picnic occasions, marriages, chat & food joints, etc. Non-toxic in nature, the shapes and surface designs on these paper cups are attractive and present an inviting look. These paper cups can also be custom printed with an outlet's logo, brand punch line or advertising message.
  15. 15. Page 15 HISTORY OF PRODUCT A paper cup is a disposable cup made out of paper and often lined with plastic or wax to prevent liquid from leaking out or soaking through the paper. It may be made out of recycled paper and widely used around the world. Paper cups have been documented in imperial China, where paper was invented by 2nd century BC. Paper cups are known as chih pei and were used for serving of tea. They were constructed in different size and colors, and were adorned with decorative designs. Textual evidence of paper cups appears in a description of the possessions of the Yu family, from the city of Hangzhou. The modern paper cups are developed in the 20th century. In the early 20th century, it was common to have shared glasses or dippers at water sources such as school faucets or water barrels in trains. This shared use caused public health concerns.
  16. 16. Page 16 MARKET POTENTIAL A wide range of paper cups are now produced and marketed in India. The paper cups are reckoned to be a high potential business for India. Manufacturing Paper Cups is the purpose of satisfying needs and wants of Consumers is the market place. Developing a strategy for delivering an effective combination of food grade quality and cost effective features for consumers within the target market is done. The prospects of paper cups depend on the value of customers who utilize it. But in our country paper cups are used by all the people as it is easy to use, hygienic and eco-friendly. Hence, per capital consumption has increased and the demand for it is recognized. While the demand for paper cups has shown a good growth, the company will be successful in strategizing its market operations. As paper cups are a product of daily consumption and necessity, their marketing will not be a problem as the consumers are aware of the advantages of using paper cups. The raw materials are indigenously available and the manufacturing process is also simple. Paper Cup find potential market in Educational Institutions Canteens, Industrial Canteens, Restaurants, Fast Foods, Catering People and Super Markets.
  17. 17. Page 17 PRODUCTION SCHEDULE A. Production process of paper cup: We have proposed to use the Automatic Paper Cup Forming Machine for our manufacturing process of Paper Cups. The general structure of paper cup forming machine is composed of three stages. They are: 1. The first stage: mainly finishes transmission of the paper cup's sidewall paper, shaping side-wall and transferring them to the second stage after shaped. 2. The second stage: transmission of the cup-bottom paper, shaping cup bottom, joining the shaped side-wall and cup bottom, automatic transmission and discharging of the shaped cup, and curling the shaped cup's edge. 3. The third stage: mainly includes 45 degree angle separating, preheating, curling bottom, curling rim and so on mechanisms, which are the important parts in finishing paper cup.
  18. 18. Page 18 PE cotted paper roll Cutting the Cup wall and bottom Cup wall sealing Bottom Inlaying Finishing Paper Cup Cup checking
  19. 19. Page 19 B. Production capacity Installed 100%: The production Capacity of this established plant will be 30,000 nos. of paper cups per day. Utilized 50%: The production Capacity of this established plant will be 15,000 nos. of paper cups per day. The schedule for production would be as follows: 9 a.m. to 1 p.m. & 3 p.m. to 7 p.m. The whole production process would be carried out simultaneously and the post production will also be speedily.
  20. 20. Page 20 FINANCIAL ASPECTS A. Fixed capital i. Land and Building: Sr. No. Particulars Sq. m. Price (Per Sq. m.) Total value (Rs.) 1 Land 100 15,000 15,00,000 2 Building 50 10,000 5,00,000 Total 20,00,000 ii. Machinery and Equipments Sr. No. Description Quantity Rate Value 1 Machine 1 6,60,000 6,60,000 2 Dyes 1 50,000 50,000 3 Office equipments and furniture - 50,000 50,000 4 Electrification and installation - 10,000 10,000 Total 7,70,000 iii. Pre operative expenses 10,000 Total Fixed capital (i + ii + iii) 27,80,000
  21. 21. Page 21 B. Working capital i. Salary (Per Month): Sr. No. Description No. Salary Total 1 Sale Cum Production manager 1 15,000 15,000 2 Skilled Worker 1 10,000 10,000 3 Unskilled Worker 1 5,000 5,000 Total 30,000 ii. Raw Materials Requirements (Per Month): Sr. No. Description Quantity Rate Value 1 Printed PE Paper 700 Kg 90 63,000 2 Bottom Reel 300 Kg 80 24,000 3 Packing Material 5,000 Total 92,000 iii. Utilities (Per Month): Sr. No. Description Amount 1 Power 1,500 units @ Rs. 4/- 6,000 2 Water, Machine Oil and Grease 500 Total 6,500
  22. 22. Page 22 iv. Other Expenses (Per Month): Sr. No. Description Amount 1 Postage and Stationary 300 2 Transportation Charge 9,500 For raw material 5,000 Packing material 2,000 Transport for sending Cup Box 2,500 3 Maintenance Charge 500 4 Phone 600 5 Consumable Stores 1,000 Total 11,900 Total Working Capital for 3 months (i + ii + iii + iv): Sr. No. Description Amount 1 Raw material (92,000 x 3) 2,76,000 2 Utilities (6,500 x 3) 19,500 3 Salary (30,000 x 3) 90,000 4 Other Exp. (11,900 x 3) 35,700 Total 4,21,200
  23. 23. Page 23 TOTAL CAPITAL INVESTMENT: Fixed Capital : 27,80,000 (+) Working Capital for 3 months : 4,21,200 Total : 32,01,200 MEANS OF FINANCE (1) Makhesana Krishna R. 16,00,600 (2) Ladani Denisha A. 16,00,600 Total Capital Investment 32,01,200
  24. 24. Page 24 FINANCIAL ANALYSIS A. Cost of Production (Per Year): Sr. No. Description Amount 1 Total Recurring Cost 16,84,800 2 Depreciation on Land @ 10% 1,50,000 3 Depreciation on building @ 5% 25,000 4 Depreciation on Machine @ 10% 66,000 5 Depreciation on Dye @ 8% 4,000 6 Depreciation on Furniture @ 8% 4,000 Total 19,33,800 B. Turnover (Per Year): Sr. No. Description Qty Rate(Rs.) Value(Rs.) 1 Paper Cups 45,00,000 0.55 24,75,000 Total 24,75,000 C. Net Profit (Before Taxation)(Per Year): Turn Over : 24,75,000 (-)Cost of Production : 19,33,800 Total : 5,41,200
  25. 25. Page 25 PROFITABILITY OF PROJECT Particulars Amount Sales and production 24,75,000 Raw materials 11,04,000 Salary & wages 3,60,000 Electricity Consumed 72,000 Repairs and Maintenance 6,000 Transportation Charges 1,14,000 Taxes – Insurance 2,65,373 Depreciation 2,49,000 Administrative Expenses 10,800
  26. 26. Page 26 PROJECT SUMMARY Particular Amount Sales 24,75,000 (-) Variable cost (-) 11,76,000 Contribution 12,99,000 (-) Fixed cost (-) 5,02,800 PBIT 7,96,200 (-) Tax (33.33%) (-) 2,65,373 PAT 5,30,827
  27. 27. Page 27 BALANCE SHEET FOR 5 YEARS For 2016-17 Liabilities Amount Assets Amount Capital (1:1) Land 15,00,000 Krishna - 13,90,000 (-) Dep. 1,50,000 13,50,000 Denisha - 13,90,000 27,80,000 Building 5,00,000 (-) Dep. 25,000 4,75,000 Machine 6,60,000 (-) Dep. 66,000 5,94,000 Profit (1:1) Dye 50,000 Krishna - 265413.5 (-) Dep. 4,000 46,000 Denisha - 265413.5 5,30,827 Furniture 50,000 (-) Dep. 4,000 46,000 Cash & Bank Balance 7,99,827 33,10,827 33,10,827
  28. 28. Page 28 For 2017-18 Liabilities Amount Assets Amount Capital (1:1) Land 13,50,000 Krishna - 13,90,000 (-) Dep. 1,50,000 12,00,000 Denisha - 13,90,000 27,80,000 Building 4,75,000 (-) Dep. 25,000 4,50,000 Machine 5,94,000 (-) Dep. 66,000 5,28,000 Profit (1:1) Dye 46,000 Krishna - 3,52,017.5 (-) Dep. 4,000 42,000 Denisha - 3,52,017.5 7,04,035 Furniture 46,000 (-) Dep. 4,000 42,000 Cash & Bank Balance 12,22,035 34,84,035 34,84,035
  29. 29. Page 29 For 2018-19 Liabilities Amount Assets Amount Capital (1:1) Land 12,00,000 Krishna - 13,90,000 (-) Dep. 1,50,000 10,50,000 Denisha - 13,90,000 27,80,000 Building 4,50,000 (-) Dep. 25,000 4,25,000 Machine 5,28,000 (-) Dep. 66,000 4,62,000 Profit (1:1) Dye 42,000 Krishna - 4,38,622 (-) Dep. 4,000 38,000 Denisha - 4,38,622 8,77,244 Furniture 42,000 (-) Dep. 4,000 38,000 Cash & Bank Balance 16,44,244 36,57,244 36,57,244
  30. 30. Page 30 For 2019-20 Liabilities Amount Assets Amount Capital (1:1) Land 10,50,000 Krishna - 13,90,000 (-) Dep. 1,50,000 9,00,000 Denisha - 13,90,000 27,80,000 Building 4,25,000 (-) Dep. 25,000 4,00,000 Machine 4,62,000 (-) Dep. 66,000 3,96,000 Profit (1:1) Dye 38,000 Krishna - 5,25,226.5 (-) Dep. 4,000 34,000 Denisha - 5,25,226.5 10,50,453 Furniture 38,000 (-) Dep. 4,000 34,000 Cash & Bank Balance 20,66,453 38,30,453 38,30,453
  31. 31. Page 31 For 2020-21 Liabilities Amount Assets Amount Capital (1:1) Land 9,00,000 Krishna - 13,90,000 (-) Dep. 1,50,000 7,50,000 Denisha - 13,90,000 27,80,000 Building 4,00,000 (-) Dep. 25,000 3,75,000 Machine 3,96,000 (-) Dep. 66,000 3,30,000 Profit (1:1) Dye 34,000 Krishna - 6,11,830.5 (-) Dep. 4,000 30,000 Denisha - 6,11,830.5 12,23,661 Furniture 34,000 (-) Dep. 4,000 30,000 Cash & Bank Balance 24,88,661 40,03,661 40,03,661
  32. 32. Page 32 B.E.P. STATEMENT FOR 5 YEARS Particulars 1st year 2nd year 3rd year 4th year 5th year 50% 60% 70% 80% 90% Sales 24,75,000 29,70,000 34,65,000 39,60,000 44,55,000 Less Variable Exps. Raw materials 11,04,000 13,24,800 15,45,600 17,66,400 19,87,200 Electricity 72,000 86,400 1,00,800 1,15,200 1,29,600 Total Variable Exps. 11,76,000 14,11,200 16,46,400 18,81,600 21,16,800 = Contribution 12,99,000 15,58,800 18,18,600 20,78,400 23,38,200 Less Fixed Cost Salary & wages 3,60,000 3,60,000 3,60,000 3,60,000 3,60,000 Postage and Stationary 3,600 3,600 3,600 3,600 3,600
  33. 33. Page 33 Transportation Charge 1,14,000 1,14,000 1,14,000 1,14,000 1,14,000 Maintenance Charge 6,000 6,000 6,000 6,000 6,000 Phone 7,200 7,200 7,200 7,200 7,200 Consumable Stores 12,000 12,000 12,000 12,000 12,000 Total Fixed Exps. 5,02,800 5,02,800 5,02,800 5,02,800 5,02,800 Net Profit 7,96,200 10,56,000 13,15,800 15,75,600 18,35,400 B.E.P. 38.70% 32.25% 27.65% 24.19% 21.50%
  34. 34. Page 34 P.V. Ratio: Contribution = x 100 Sales 12,99,000 = x 100 24,75,000 = 52.48% Break Even Point (in Rs.): Fixed Cost = x 100 P.V. Ratio 5,02,800 = x 100 52.48 = 9,58,079
  35. 35. Page 35 PROJECT ADVANCEMENT AND FUTURE PROSPECTS Owing to the demand and sales of this product it seems that this product has a good demand in future because of our product is Eco- friendly and as today customers are aware about the importance or benefits of Paper cups in compare to other material. Today in our society 90% of people are using paper cups or other material’s cups and that’s why we have open market for our product. In future people will take turn towards our product after knowing benefits of Paper Cups. Now a day’s Paper cups are using in every field like, marriages, Coffee Shops, Tea shops, Educational institutions canteens, Industrial canteens and IT companies canteens etc. So we can expand our production and types of Paper Cups in the sense of different types of pictures on cups.
  36. 36. Page 36 BIBLIOGRAPHY Books:  Production Management - By: Himalaya Publishing House  Marketing Management - By: Tapan K. Panda  Financial Management - By: B.S. Shah  Human Resource Management - By: K. Aswathappa Websites:  www.google.com  Wikipedia

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