NOORUDDIN MC070400829 TEACHER: CH. SHAHZAD ANSAR
ENTREPRENEURSHIP ENTREPRENEUR SHIP MGT-602 MGT-602 PROJECT – BUSINESS PLAN
RECYCLING PLASTIC PLAN Company Name & Address Mc070400829 VIRTUAL UNIVERSITY OF PAKISTAN MA JINNAH CAMPUS DEFENCE ROAD, OFF. RAIWIND ROAD, LAHORE UAN: 042-111-880-880 FAX: 042-9202174
Our Statement of Confidentiality The unders undersigned igned reader acknowledged that the infor information mation provided by the MC070400829 in this business business plan is confidential confidential,, therefore therefore , reader agrees agrees not to disclose it without without the express written permission of MC070400829 MC070400829 MC070400829 Signature
Our Statement of Financial Needs
There are three primary financial statements: The balance sheet, income statement and statement of cash flow. Each one of these statements is equally important in commun com municat icating ing the exi existi sting ng or pro projec jected ted fin financi ancial al heal health th of the our recy recycli cling ng business. These statements are prepared at the end of the financial year to assist our business to consistently establish, meet goals and objectives. o
Income Statement:
The major category in this statement are revenues and expenses
Both revenue revenue and statement statement are to be recorded recorded in the year they they are earned or expensed, not when when the actual cash is paid or received.
Revenues: sales revenue, service revenue, and interest revenue.
Expenses: salaries of executives, staff salaries, R&D expenses, bad
debt expe expense nse,, depr depreci eciati ation on for the cur curren rentt yea yearr expe expense nse,, int intere erest st expense, and income tax expense o
Cash Flow Statement: Thiss fi fina nanci ncial al st state ateme ment nt dea deals ls wi with th th thee ca cash sh tr trans ansact actio ions ns of th thee Thi business in a financial financ ial year.
Each period for which the cash flow statement is prepared begins with a beginning cash balance (which may be zero).
Examples : any revenue received in cash is added and expenses paid in cash are subtracted. The only transactions which are recorded in this statement are those which have been made in CASH.
Executive Summary …………………………………………………… …………………………………………………………….1.0 ……….1.0 Industry Analysis …………………………………………………… ……………………………………………………………….2.0 ………….2.0 Future outlook and trends……………………… trends………………………..2.1 ..2.1 Analysis of competitors…………………… competitors………………………….2.2 …….2.2 Market segmentation …………………………… ……………………………2.3 2.3 Industry forecast…………………… forecast…………………………………2.4 ……………2.4 Description of Venture……………………………………………………………3.0 Product…………………………………………..3.1 Services…………………………………………3.2 Size of o f business…………………………………3.3 Office equipment and personnel………………..3.4 Background of entrepreneurs…………………..3.5. Marketing Plan…………………………… Plan……………………………………………………… ……………………………………..4.0 …………..4.0 Form of ownership……………………… ownership……………………………..4.1 ……..4.1 Identification of partners…………………… partners………………………4.2 …4.2 Authority of principals………………… principals…………………………4.3 ………4.3 Management team backgrounds……………….4.4 Roles and responsibilities of members of organization………………… organization……………………4.5 …4.5 Organization Plan …………………………… ……………………………………………………… ………………………………..5.0 ……..5.0 Form of Ownership …………………….……...5.1 Identification of Partners…………………… Partners…………………….. .. 5.2 Management Team Background ……………..5.3 Role and Responsibilities………… Responsibilities……………………..5.4 …………..5.4 Assessment of Risk……………………… Risk………………………………………………… ……………………………………..6.0 …………..6.0 Evaluate weakness of business ………………...6.1 New technologies………………………… technologies………………………………6.2 ……6.2 Financial Plan………………………… Plan……………………………………………………… …………………………………………7.0 ……………7.0 Sources of funds………………………… funds………………………………..7.1 ……..7.1 Performa income statement………………… statement……………………7.2 …7.2 Performa balance sheet………………………… sheet…………………………7.3 7.3 Cash flow projections………………… projections…………………………..7.4 ………..7.4
Appendix………………………………………………………………………..8.0
1.0 EXECUTIVE SUMMARY
The purpose of the proposed MC070400829 Recycling Plastic Plan is to provide resources which seeks to meet the day da y to day need of plastic consumable,
The growing utilization of plastic in industrial and consumer applications, combined with increased consumer awareness surrounding solid waste recycling, has lead to increase demand for recycled plastic materials for recycling
Repl Re play ay Pl Plas asti tics cs wi will ll ca capit pital aliz izee on th thee opp oppor ortu tuni niti ties es in th thee re recy cycl cled ed re resi sin n and pac packag kagin ing g ma mark rket etss th thro rough ugh tw two o ma main in di divi visi sion ons: s: a Recycl and d a Recycling ing Division an Packaging Division .
Thee Th
soph so phis isti tica cate ted d
wash wa shin ing g
trea tr eatm tmen entt
plan pl antt
inst in stal alle led d
at
prem pr emis ises es
enab en able less
MC070400829 to produce high quality plastic raw materials and plastic products made from hundred percent post industrial waste. waste.
The plastic is then dried and extruded into high quality recycled granules on the Company’s Double vented Japanese extruders. And in turn produced a large variety of value added products.
MC070400829 is earth friendly and it provides a clean environment to this part of o f the world. We firmly believe that it is everyone’s responsibility to recycle everything they can b ecause they can make the difference. We are trying so hard to stem the tide of pollution that is overwhelming our beautiful planet. We encourage you to take a part in it.
2.0 INDUSTRY ANALYSIS ANALYSIS 2.1 FUTURE OUTLOOK AND TREND
Sales passing 15 million in first year, 31 million in year 2, growing to $43 million due to high demand in the region.
Gross margin of 35% or more in first year, 45% in second year then 50% o r more. Net profit of 13% in year one, then exceeding 20% annually starting in year two.
The main key to success is that we will buy all kind of industrial/ post consumer plastic materials and scraps in various forms, forms, like baled/fluff/sheet/powder/rolls/others. baled/fluff/sheet/powder/rolls/others. Some of the regular materials are listed below. If you have additional material related in plastic. We can handle that too. Material
Form
Color
HDPE
Bale Baled/ d/lu lump mps/ s/fl fluf uff/ f/po powd wder er & etc etc
Natu Natura rall /ot /othe hers rs
LDPE
Baled/lumps/fluff/powder Baled/lumps/fluff/powder & etc
Natural /others
LLDPE
Baled/lumps/fluff/powder Baled/lumps/fluff/powder & etc
Natural / Others
PET PS PVC
Baled/lumps/flakes/rolls Baled/lumps/flakes/rolls & etc
mix
Lumps/Regrind/Rolls Lumps/Regrind/Rolls
Natural /others
Baled/lumps/fluff/Rolls Baled/lumps/fluff/Rolls
Natural /others
BOPP (ROLLS) all size mix rolls
printed / unprinted
PET (ROLLS) all size mix rolls
printed / unprinted
all size mix rolls
printed / unprinted
PP (ROLLS)
Audio/Video damage/broken/crush/rolls Cassettes / tapes Tetra Pack PE/Allu Coated Sheets/Rolls Reels/sheets/etc
Quantity
Description
full industrial/post consumer. container full industrial/post consumer. container full industrial/post consumer. container full Post consumer container Bottle grade, preform full INJECTION container full extrusion container full Rejects/Surplus/Over container Produce materials full Rejects/Surplus/Over container Produce materials full Rejects/Surplus/Over container Produce materials
an y
full container
rejected/surplus/ overproduce tapesFor recycling
Unprinted
full container
Rejects/Surplus/Prime Over Produce Material
Along with good resources we have enrich management and marketing capabilities to promote our business to provide efficient resources. The forecasted benefits we will be going to avail are as follows:
2.2 ANALYSIS OF COMPETITORS
Plastics' competitive edge rests with its proximity to its target markets, as well as the industry knowledge, reputation and contacts of its senior management. Their many years of direct experience have led them to identify this unique opportunity and put together the technology and sources to take advantage of it. Their reputation in the specific market segment will result in the achievement of long-term commitments co mmitments for our production 2.2.1 OUR COMPETITORS
We have already surpassed the following characteristics through strategic planning and forecasting, which will deal the most common competitive issues in our future run. Such issues are •
Patents— We have already applied for our product under Trade Mark and Patent Law
•
High start-up costs—In many cases, this barrier is the most daunting one for small businesses, we have a huge investors and we encourage more to promote us.
•
Knowledge—Lack of technical, manufacturing, marketing, or engineering expertise apart from other competitors , we will resolve it as top level management of our company is high skill and experiences.
•
Market saturation—It is a basic reality that it is more difficult to carve out a niche in a crowded market than it is to establish a presence in a market marked by b y relatively light competition. We We are not going to sell in open market. But our plan is to provide distributors the chance to earn themselves and earn us revenue as target planning.
2.3 MARKET SEGMENTATION
We have already selected certain product produc t to out market segmented audience. Such services are
Consulting,
Size Reduction/Grindling,
Subcontracting Jobs,
Fine Seperation,
Dry Blending.
2.4 INDUSTRY I NDUSTRY FOCUS
Our facility is equipped with the latest state-of-the-art single and twin screw compounding equipment. Each of these instruments incorporates computer controlled operations and data acquisition to ensure the optimum product quality and lot-to-lot consistency
Now under the MC070400829 umbrella all the companies are dedicated to providing a superior level of service and quality. If you would like to try this for yourself visit the online catalogue or contact us
3.0 DESCRIPTION OF VENTURE 3.1 PRODUCTS We have a wide varities of product to offer which are carefully designed as per the rules and
regulations of IS0 9001-2000 to provide better quality plastic products / raw materials.
3.1.1 REPROCESS GRANNULES The Rep Reproc rocess essed ed Gra Grannu nnules les we of offer fer has an excellent balance of impact strength and flexure modulus as well as offering high melt flow and good processability .
3.1.2 GARBAGE BAGS When it comes to Garbage bags ,Refuse sacks, Refuse Garden sacks , Bin Liners and standard can liners, Modern offers quality, reliability and customer service at competitive prices.
3.1.3 PLASTIC PIPES Excellent mechanical strength and impact resistance . Highly controlled production processes leading to high quality pipe products . No requirements for protective coatings .
3.1.4 PET BOTTLES A tec techno hnolog logy y lea leap p tha thatt bre breaks aks the mold. With With a Bottle that provides all the multiple advantages of PET PE T. It Itss li ligh ghtw twei eigh ghtt , it itss sh shat atte terp rpro roof of , an and d it itss recloseable.
3.1.5 PLASTIC MOLDED PRODUCTS One of MC070400829 main aims is the drive for new and inn innova ovativ tivee tec techni hnique quess to pro provid videe cos costt effective solutions . Our house hold products such as Hangers / Buckets / Cups and other
3.2 SERVICES Consulting,
Size Reduction/Grinding,
Subcontracting Jobs,
Fine Separation,
Dry Blending.
3.3 SIZE OF BUSINESS Strategist , Directors, Investors
Top Level Management 3 Managers, Planning, Distribution & Finances
Researchers , 5- 6 according to plant resources and new conducting operations
Office Staff, Staff, 10-15 Accountants, Administration, Sales Rep, Outdoor Clerks Clerks
Non Contractual Employee. 5 Peon and Sweepers to keep it clean Plant Workers , 10 Shift operators and technician
3.4 OFFICE EQUIPMENT & PERSONNEL Heavy Duty Machineries at Plant
Office Furniture, Chairs, Tables, Filing Closet,
Electronics, Computers, Servers, Routers, Radio Link Tower Tower etc
Accessories, Papers, Pen, Files etc
3.5 BACKGROUND OF ENTREPRENEUR rd Entrepreneur is currently studying in VU 3 Semester, having 5-6 year experienced in
different industries such as, Commerce, Trade, Manufacturing etc and family history of running different entrepreneur businesses.
4.0 MARKETING PLAN 4.1 PRICING MC070400829 has chosen to focus on the production of plastic packaging materials from recycled post-consumer beverage bottles. Because of the industry experience and expertise of the management, we have identified a significant available market in the Pakistan Unit Prices
2008
2009
2010
2011
2012
Recycled Bags
0.25
0.30
0.35
0.36
0.40
Recycled Mold Products
3.75
4.75
5.75
6.75
7.75
Recycled Bottle
0.45
0.50
0.55
0.60
0.65
Recycled Pipes
12.99
14.99
16.99
18.99
20.99
Direct Unit Costs
2005
2006
2007
2008
2009
0.5
0.10
0.15
0.20
0.25
Recycled Mold Products
1.75
2.25
3.50
4.75
6.00
Recycled Bottle
0.30
0.32
0.35
0. 3 8
0.43
Recycled Pipes
9.19
9.50
11.75
12.80
13.17
Recycled Bags
4.2 DISTRIBUTION
All of our initial marketing strategy will be to secure contracts in that segment, and after reaching full planned capacity, look to grow in concert with that segment and related markets.
We see little need at present for further market research and development, and will focus on continually updating our production technology in an effort to remain in the forefront of our chosen marketplace
4.3 PROMOTION PRODUCT FORECAST Milestone Start Date
End Date
Budget
Advertising
1/1/2009
31/12/2010
Rs.5,096,256
Banners
1/1/2010
31/12/2012
Rs.1,553,896
News paper Adds
1/1/2009
Brochures
31/12/2012
Rs.1,099,153
1/1/2009
31/12/209
Rs.226,153
Rewards & Incentives
01/01/2011
31/12/2011
Rs.300,000
Awards
01/01/2012
31/12/2012
Rs.824,542
Scholarships
01/01/2010
31/12/2012
Rs.1,000,000
Totals
Rs.10,100,000
4.4 CONTROLS Because Beca use the Com Company pany is a sta startrt-up, up, our mil milest estone oness wil willl sur surrou round nd the es establ tablis ishmen hmentt of continuing facilities, confirmation of sourcing and sales contracts, equipment acquisition and installation, staffing and training, and initiating production
Order Equipment
Secure Location
Hire & Trained Skilled Labor
Hire Plant Manager
5.0 ORGANIZATION PLAN 5.1 FORM OF OWNERSHIP
MC070400829 MC0704 00829 is owned by the initial founders, founders, Noorud Nooruddin din and other investors investors who are the proposed three executives execu tives of the operating entity.
The plan was conceived and developed by these individuals, with the intent to apply their the ir ext extens ensive ive expe experie rience nce and cont contact actss in the ind indust ustry ry to bui buildi lding ng a suc succes cessfu sfull profitable corporation
5.1.1 START UP SUMMARY
Our largest Start-up Requirement is the building of the recycling and extrusion facility. facility. Its final value at completion is listed below as a long-term asset of 7,620,000. Aside from the building itself, we need 2,500,000 2,500,00 0 in machinery and fixtures, 5,000,000 of inventory (plastic raw materials) and cash to cover us through the initial year.
5.2 IDENTIFICATION OF PARTNERS NOORUDDIN , one of the active partner is the student studying in VU MBA 3rd Semester.
Alongwith Investors from different part of the Pakistan enjoying their return for the initial investment they have made to purchase Bonds of MC070400829 5.3 AUTHORITY OF PRINCIPALS
Chief Executive Office alongwith the Top, Top, Lower And Middle Managers playing their parts. Also to focus on stakeholder whereas the future Investors
5.4 MANAGEMENT TEAM BACKGROUND
MC07040 MC0 7040829 829 cur curren rently tly has com commit mitment mentss fro from m cus custom tomers ers to pur purchas chasee all of the ini initia tiall production capacity. capacity. Excess flake will be sold to outside customers. customers. All contractual contractual planned and skilled labor from top managers upto lower plant workers will be higher based on expertise and qualification. in this type of industries industries for the last Nooruddin, President and CEO, has a history of working in 5 years as a junior and have the capabilities to work with other to encourage potential hidden inside the plastic business Mr. Arif Karim, Invest Investor or in Money Market for the last 10-15 years have a portf portfolio olio of more
than Rs.1,000,000 in different different securities Ms. Sarah Zain, SEVP and EVP in Garfield Bank in Forex and Treasury Division and have
the founding that this business have potentials in the future to attract investor 5.5 ROLES AND RESPONSIBILITIES RESPONSIB ILITIES OF MEMBERS OF ORGANIZATION ORGANIZATION Production Pe P ersonnel Responsibilities
Shift Supervisor
To supervise all day to day operation and keep it going
Maintainence Techs
To maintain all technical solution arise from non functionality of machinery
Skil Sk ille led d Rec Recy ycl clee Plan Plantt Lab Labor or
To pro produ duce ce an and d mak makee it it ava avail ilab able le wi with thin in ti time me
Product Pro duction ion Ass Assist istant ant (ful (fulll time) time)
To assist assist in in product production ion iss issues ues
Sales Sal es and and Market Marketing ing Pers Personne onnell
To make make sales sales and and keep keep achie achievin ving g their their tar target getss
General and Administrative Personnel
Responsibilities
President
To make deicisions
Vice Pres COO
To assist in making decisions
CFO
To control of all financial operations and forecasting
Plant Manager
To achieve by producing as per given target
Accountant
Day to day balancing of books
Clerk
To assist in miscellaneous activities
Shipper Receiver
To keep track of inventories.
6.0 ASSESSMENT OF RISK 6.1 EVALUATE WEAKNESS OF BUSINESS 6.1.1 Limited Supply of raw material
Recycled Plastics s are in high demand, and demand is currently under-supplied.
Many manufacturers are delaying expansion because of o f uncertainty of supply.
Entrants would have to consider sourcing post-consumer p ost-consumer or post-industrial waste and clean and refine it rather than attempting to purchase flake on the open market.
6.1.2 Equipment costs are high and industry specific, resulting in a high exit cost.
Because of the scarcity of RPET flake, entrants may be forced to establish cleaning and refining facilities for post-consumer bottles. b ottles.
The equipment required is costly and very industry specific. It would not easily be resold as a system.
There is a market for used extrusion equipment, equ ipment, which normally sees 60-70% of new value being realized.
6.1.3 Vertical integration is an important consideration and difficult to accomplish successfully.
Because of the scarcity of RPET resin, and to maximize profit potential, entrants must consider a two-stage production facility.
Cleaning and refining post-consumer bottles and extruding the resulting flake into commercial products requires a management team such as Replay has, with a broad range of expertise, experience, industry contacts and knowledge in both areas.
6.1.4 Firm contracts for supply and sales.
Replay Management's industry contacts will allow us to secure contracts for both supply of feed stock and sale of finished goods.
6.1.5 Freight is a major cost of operations; proximity to source of supply and markets is crucial.
Hauling plastic materials is expensive so entrants will have to c onsider establishing facilities close to materials and markets.
Entrants with existing operations would have to consider new separate facilities in many cases, reducing economies of scale and making management more difficult.
6.2 NEW TECHNOLOGIES 6.2.1 RPET Flake
The current pricing pricing for virgin virgin resin is 0.65-0.73 0.65-0.73 per lb. and 0.42-.53 for RPET flake. The new spread between the two has traditionally been maintained at approximately $0.20 per lb. Technological changing has ascertain a scertain great return. 6.2.2PET Film & Sheet
The reported market demand (to replace virgin PS, PVC and PET) if RPET was available is estimated estimated at 1 billion Current pricing for RPET sheet sheet is 0.70-0.79 per lb. This technology for Bottle reshaping and designing have been adopted by different international company. 6.2.3RPET Strapping
The total reported domestic plastic strapping market is 240 million . Of this market, industry usag us agee of vi virg rgin in pol poly ypr propy opyle lene ne is 13 132 2 mi mill llio ion n and of PE PET T is 10 108 8 mi mill llio ion n . St Stra rapp ppin ing g technology have been advanced
7.0 FINANCIAL PLANS 7.1 SOURCES OF FUNDS Stakeholder o o
Shareholders
o
Investors
o
Money Market
o
Financial Institutions
7.2 PERFORMA INCOME STATEMENT
Income Statement Revenue: Gross Sales Less: Net Sales
0.00 Sales Returns and Allowances
0.00 0.00
Cost of Goods Sold: Beginning Inventory Add:
Less: Cost of Goods Sold
Purchases Freight-in Direct Labor Indirect Expenses Ending Inventory
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Gross Profit (Loss)
0.00
Expenses: Advertising Amortization Bad Debts Bank Charges Charitable Contributions Commissions Contract Labor Credit Card Fees Delivery Expenses Depreciation Dues and Subscriptions Insurance Interest Maintenance Miscellaneous Office Expenses Operating Supplies
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Payroll Taxes Permits and Licenses Postage Professional Fees Property Taxes Rent Repairs Telephone Travel Utilities Vehicle Expenses Wages Total Expenses
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Net Operating Income
0.00
Other Income: Gain (Loss) on Sale of Assets
0.00
Interest Income Total Other Income
0.00 0.00
Net Income (Loss)
0.00
7.3 PERFORMA BALANCE SHEET
Balance Sheet Current Assets: Cash Accounts Receivable Less: Reserve for Bad Debts Merchandise Inventory Prepaid Expenses Notes Receivable Total Current Assets Fixed Assets: Vehicles Less:
0.00 0.00 0.00
0.00 0.00 0.00 0.00 0.00
Accumulated Depreciation
0.00 0.00
0.00
Furniture and Fixtures Less: Accumulated Depreciation
0.00 0.00
0.00
Equipment Less:
Accumulated Depreciation
0.00 0.00
0.00
Accumulated Depreciation
0.00 0.00
0.00
Buildings Less: Land
0.00 Total Fixed Assets
0.00
Other Assets: Goodwill
0.00 Total Other Assets
0.00
Total Assets Asset s
0.00
Liabilities and Capital Current Liabilities: Accounts Payable Sales Taxes Payable Payroll Taxes Payable Accrued Wages Payable Unearned Revenues Short-Term Notes Payable Short-Term Bank Loan Payable Total Current Liabilities
0.00 0.00 0.00 0.00 0.00 0.00 0.00
Long-Term Liabilities: Long-Term Notes Payable Mortgage Payable Total Long-Term Liabilities
0.00 0.00
0.00
0.00
Total Liabilities
0.00
Capital: Owner's Equity Net Profit
0.00 0.00
Total Capital
0.00
Total Liabilities and Capital
0.00
7.4 CASH FLOW PROJECTIONS
Cash Flow Budget Worksheet [Month] Beginning Cash Balance Cash Inflows (Income): Accts. Rec. Collections Loan Proceeds Sales & Receipts Other:
Total
0.00 0.00 0.00 0.00 0.00
Total Cash Inflows Available Cash Balance Cash Outflows (Expenses): Advertising Bank Service Charges Credit Card Fees Delivery Health Insurance
0.00 0.00
0.00 0.00 0.00 0.00 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Insurance Interest Inventory Purchases Miscellaneous Office Payroll Payroll Taxes Professional Fees Rent or Lease Subscriptions & Dues Supplies Taxes & Licenses Utilities & Telephone Other: Subtotal Other Cash Out Flows: Capital Purchases Loan Principal Owner's Draw Other: Subtotal Total Cash Outflows Ending Cash Balance
8.0 APPENDIX
0.00
0.00
0.00 0.00 0.00 0.00
0.00 0.00 0.00
0.00 0.00 0.00
Bangs, David H. The Business Planning Guide: Creating a Plan for Success in Your Your Own Business. Upstart, 1998. Belkin, Lisa. "The Art of Making a Plan and Making It Happen." New York Times. December 18, 2000. Covello, Joseph A., and Brian J. Hazelgren. The Complete Book of Business Plans. Sourcebooks Trade, 1994. Review. July-August 1997. "How to Write a Great Business Plan." Harvard Business Review.
Jones, Rebecca. "Business Plans: Roadmaps for Growth and Success." Information Outlook. December 2000. Kravitt, Gregory I. Creating a Winning Business Plan. Probus, 1993. Massarella, Gregory J. et al. How to Prepare a Results-Driven Business Plan. Amacom, 1993. Pinson, Linda. Anatomy of a Business Plan. 2d ed. Enterprise Dearborn, 1993. "Your Business Plan." Phoenix Business Journal. September 29, 2000
