Why Paper Bags? • Eco-friendly • increasing awareness of hazards of plastic • Ban imposed on plastic bags in many states • Current fashion trend
Executive Summary • Company: Eco Fashion Bags Pvt. Ltd. • Product: Paper bags • Clients: Malls, Departmental stores, Super Markets, Gift shops, etc. • No. of Promoters: 11 • Contribution of each promoter: 200000 Rs. • Target market: 6 cities of Maharashtra • Projected sales: 7200000 units p.a.
Company Profile Vision To become a proactive , integral and responsible member of our environment and community, making us a strong global supply base for world class products. Mission To constantly grow the customers by designing superior and cost effective product through contribution of ideas.
Values Excellence Integrity Passion Teamwork Commitment
Company Logo
blue colour of earth –Peace, Purity and coolness. • green arrows - company is highly concerned about protecting the earth. •
Product Profile Products range: • The bags of six sizes are being manufactured, • Size ranges from; 18”×24” to 40”×50”. • We can also manufacture bags according to the customers’ specifications & requirement. Product strength: All our product having good busting strength and it is between 18- 36 g/inch. Product quality: Manufacturing superior quality products. Purchases reputed supplier. Product price: Our price range is between 3 to 10 Rs.
Total Company Risk Product Market Risk • Customer loss • Product Obsolescence • Competition Increases • Product Demand Decreases Financial Risk • Capital cost change • Inflation • Default on debt • Exchange rate changes Legal Risk • Shareholder and Employee discrimination lawsuits
Input risk • Input price increases • Labor strikes • Key employees leave • Supplier fails Operational Risk • Machinery breakdown • Product defect increases • Inventory Obsolescence Regulatory Risk • Environmental law change • Price support ends
MARKETING PLAN EXECUTIVE SUMMARY Target the big cities of Maharashtra like Mumbai, Pune, Nagpur, Nasik, Aurangabad and Kolhapur • Current demand of the product in six cities is around 40lakhs/month and is expected to go high • Consumer acceptance and brand recognition are the major barriers • USP is excellent service, quality products at a reasonable price, transportation network and sales force capabilities SWOT Strength: • Low cost with high quality. • Dedicated & punctual staff. • On time delivery. • Favorable access to distribution networks. Weaknesses: • Entry. • Inexperience. • High cost structure. • Limited area of operation. • Not able to enjoy economy of scale. •
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Opportunities: • Scope of export. • Large market. • Changing of lifestyle/fashion. • Environmental conscious customer. Threats: • Large number of competitors. • Threats of substitute product. • Highly sensitive & volatile market. • New regulation. MARKETING STRATEGY Marketing objective: • important domestic player in terms of market share • backward integration • expand business Target market: • Our customers would be malls, multiplexes, hypermarkets, supermarkets, departmental stores, speciality stores, gift shops etc
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Demand forecast: The Demand of the product in six cities would be around 40lakhs units/month. Promotion: Promotion strategies like; • Discounts • Salesperson incentives • Word of mouth and Friends’ network • Commission to sale person, credit to customers • catalogs • Contract with the NGOs working on environment friendly projects like use of paper bags • Travelling and other incentives etc. Strategies: • market penetration strategy DOING MY PART TO HELP THE EARTH
Competitors: • A.L paper house, jaipur, Rajasthan. • Delhi paper bag manufacturer, Delhi. • Vishal paper bag company, Mumbai, Maharashtra. Market research: Primary data through buyers’ intention survey FINANCIAL: Break even analysis: Break Even Point will be achieved in 10.6 Months Sales forecast: target sales would be around 6 lakhs units/month CONTROLS: Marketing organisation: • 1 sales manager responsible for the sale in six cities. •
7 salesmen; 3 for Mumbai, 2 for Pune, 1 for Nasik and Nagpur and 1 for Aurangabad and Kolhapur [first year]
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OPERATION PLAN A) Plant Location:PATALGANGA MIDC (RAIGAD) Maharashtra. Distance from Mumbai is 75 kms. Distance from Pune is 77 kms. Size of land= 2000 Sq ft. Approximate cost of land= Rs 540000 (270 Rs, per Sq Ft). Approximate construction cost= Rs 510000. DOING MY PART TO HELP THE EARTH
B) Plant Machineries and Equipment: 1) Automatic Paper Bag Manufacturing Machine Cost of machine = Rs 4,80,000/Production capacity= 30,000 bags per shift (8 hrs). Utilized capacity = 24,000 bags per shift 2) Automatic Screen Printing Machine Cost of each machine= Rs 22,000/Production capacity = 12000 bags per shift (8 hrs). 3) Eyelet Machine. Cost of each machine= Rs 20,000/Production capacity =6000 bags per shift (8 hrs). 4) D-Shape Eyelet Machine. Cost of machine= Rs18, 000 /Production capacity= 6000 bags per shift (8hrs). DOING MY PART TO HELP THE EARTH
C) Plant Layout:D) Raw Material Requirement: For producing the paper bags the CRAFT Paper is used as a raw material. The required specification is in terms of Busting Factor and GSM of the paper. For producing the quality bags the busting factor of the craft paper should range between 18 to 36 gm/inch and the GSM of the paper is between 120 to 400. DOING MY PART TO HELP THE EARTH
E) Suppliers :1)Premium Paper & Board Industries Ltd. 2)Rama Pulp & Paper Ltd. 3)Kay Pulp & Paper Mill Ltd. 4)Aerographic Papers Pvt. Ltd.
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Human Resource
Administrative Workforce Name of position
2009-10
2010-11
2011-12
Finance manager 1
1
1
Sales manager
1
1
1
Asst.Sales manager
-
-
1
Salesman
7
10
12
Clerk
1
1
1
Guard 3 Manufacturing Workforce -
3
3
No .of position 2009-10
2010-11
2011-12
Supervisor
1
1
2
Skilled
1
2
2
Unskilled
6
8
12
Helper
1
1
2
Various HR related issues• Bonus • Attendance • Annual leave with wages • Holidays • Working hours • Safety and health • Benefits • Record maintenance ‘Motivating our people’
Legal aspects…. • • • • •
Approval of nameMemorandum of AssociationArticle of AssociationCertificate of IncorporationTax registration-
Financial Plan
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Assumptions • Inflation rate may vary between 4%6%. • Sales target will be achieved according market research and production capacity. • Capital cost may vary but marginally
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Financial policies • • • • • •
Depreciation -10% Creditors. Debtors . Closing stock. Short term investment. Profit margin 6 %.
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Capital Capital Requirement Particulars Fixed assets requirement Working capital requirement Total
Amount Rs. 1702000 2271000 3973000
Capital sources Particulars Promoters contribution Bank Loan Total
Amount Rs. 2200000 1800000 4000000
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Projected Cost Sheet Particulars Direct cost
1st year
2nd year
Amt. in Rs. 3rd year
27888000 41886000 66162000
Administrative overheads
1758600
2207180
2704462
Selling overheads
2298600
3067180
3904462
Total Cost Profit at 6 % Sales Selling Price Per Unit
30186600 44953180 70066462 1811196
2697190
4203987
31997796 47650370 74270449 4.45
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4.00
4.15
Projected Trading & P&L A/c Particulars Net sales Gross Profit Depreciation
1st year
2nd year
Amt. in Rs. 3rd year
31997796
47650371
74270448
4304044
5750696
8521470
120200
157180
141462
37500
37500
1831061
3255906
Indirect Income Net Profit
1367808
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Projected Balance Sheet Particulars
1st year
2nd year
Amt. in Rs. 3rd year
Share Capital
2200000
2200000
2200000
Bank Loan
180000
1800000
1800000
Dividend
275000
825000
1100000
Fixed Assets
2821800
2664620
3873158
Current Liabilities
6227484
6407509
4123651
Current Assets
8564489
9841757
13383268
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Cash Flow Statement Particulars
2009-10
2010-11
Amt. in Rs. 2011-12
Total Inflow
40210839
74515952
109500464
Total Outflow
40190075
74453852
109473387
Net Inflow
20764
62100
29900
Discounted cash flow Amt. in Rs. Particulars Statement Amount Rs. Total Discounted Cash Inflow Discounted Cash out flow Net Present Value
40162089 4490860 35671229
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Ratio Analysis Particulars Current Ratio
2009-10
2010-11
2011-12
1.36 :
1.65 :
1.56 :
1
1
1
0.78 :
1.09 :
1.08 :
1
1
1
0.60 :
0.52 :
0.37 :
1
1
1
13.45
12.07
11.47
%
%
%
Net Profit Ratio
4.27%
3.84%
4.38%
Working Capital TOR Inventory TOR
14.09
11.53
14.62
13.32
16.92
Quick Ratio Debt Equity Ratio Gross Profit Ratio
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8.86
Break Even Analysis • BEP In Units
= 64,16,140 (units)
• BEP IN RUPEES = 2,84,87,662 (Rs.) • Break Even Point will be achieved in 10.6 Months
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