Pvc Project Report

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Manufacturing Rigid PVC and Hose Pipes Pipe Fittings and Solvent Cement

Project Report

[MANUFACTURING RIGID PVC PIPES ]

Project Report Project Outlay 5, 00, 00,000 INR

Production Capacity 51000 Tons per Annum

Product Ranges 20 mm to 400 mm Diameter Rigid PVC Pipes

Demand and Supply Around 35%, 100000 Tons per Annum

Manufacturing Rigid PVC Pipes Orissa Project


Project Report

Contents 1.0 Project Background............................................................................................ 4 2.0 Application of PVC Pipes:................................................................................... 6 3.0 Proposed Project Site......................................................................................... 6 .4.0 Production Capacity:......................................................................................... 6 5.0 Market Status.....................................................................................................7 5.1 Supply............................................................................................................... 7

t 5.2 Demand.............................................................................................................8 c e j 6.0 Demand and Supply Gap:.................................................................................. 8 o r P 7.0 Plant and Machinery: ......................................................................................... 9 s .............................................................................................................................. 11 a s 8.0 Machinery Sources...........................................................................................15 i r O 9.0 Raw Materials..................................................................................................16 10.0 Sources of Raw materials ..............................................................................16 11.0 Utilities to Manufacture ..................................................................................16 12.0 Land, Building and Other Civil Works............................................................. 16 13.0 Estimated Cost of the Project on PVC Pipes ................................................... 17 14.0 Means of Finance: .......................................................................................... 19 15.0 Employment Generation................................................................................ 19 16.0 Profitability.................................................................................................... 20 17.0 Conclusion: ................................................................................................... 21


Project Report

1.0 Project Background The main application of PVC in India is basically in shape of pipes. India is the eighth major consumer of plastics in the world and the plastic industry demand is expected to grow by around 10-12% per annum for the next few years. The global PVC pipe demand is expected to grow by 4% per annum. PVC pipes, because of its anti corrosion features and durability, are used extensively, instead of conventional building material in various construction applications. Further on-going accelerated irrigation benefit program and major thrust given to infrastructure development in India, and the construction boom has given a fillip to PVC building material demand in the recent past. Looking at the rise in PVC consumption, it is expected to have diversified product range within the same product line which the present proposal intends to do. The PVC pipes to be manufactured can cater to the growing demand of macro-irrigation sector, sprinkler irrigation, lift-irrigation etc. which are major growth sectors apart from other conventional infrastructural requirements. As per the latest estimation, global demand for PVC is growing at four per cent per annum, while the Indian industry is expected to grow at 10 per cent in coming years. The continued focus of government on irrigation and construction activity would drive the growth going forward for PVC pipes. Even on a conservative estimate, analysts expect PVC pipes companies to grow at 25 per cent in top line and about 15 per cent in bottom line. PVC and pipes demand is robust on back of growth in housing, rain Salient Features of PVC Pipes water harvesting and irrigation Higher Flow: compare to GI, AC & CI Pipes due to projects along with domestic smoother internal surface. demand and demand from other Energy Saving: Low friction loss ensures lower pumping small scale industries. Analysts cost. estimate that that the micro irrigation Light Weight: make them easy to store, handle, transport and install. opportunity in the country to be Seamless: make them health friendly avoid contamination around Rs 61,500 crore in the next of the fluid running in it. decade and more than 85% pipe Durability: they last longer requirement will be from PVC sector Resistance: to chemical reactions, electrolytic, only. corrosions. Odorless: Ensures hygienic conditions for potable water. Economical: Almost Zero maintenance as free from duct, scale formations & unharmed by moisture. Ideal Substitute: Substitute to Cl. GI & MS Pipes at almost 40% cost.

As per the estimation, the average growth in PVC consumption over the past five years has been around 10% and expected to grow at a higher rate in the coming years. Considering the recent Government policy initiatives and increasing private demand, requirement of PVC pipes is expected to grow at about 20% over the next few years. This will translate into a demand growth of about 15% per annum. So, looking at this prospect, the


Project Report

proposed project is going to meet a substantial part of the domestic PVC pipe requirement of Orissa and eastern region of the country. The proposal is to set up a rigid PVC pipe manufacturing unit in the state of Orissa after due analysis of the demand and supply situation and expected contribution of this unit to meet the demand supply gap. On the domestic market front, PVC is already in short supply in India. Against a capacity of 788,000 MT, the domestic demand for 2001-2002 was around 825,000 MT and this is expected to grow by 8% - 10% over the next 3 years. In other words demand will continue to be in excess of supply in the Indian market.

Agriculture plays an important role in the demand where PVC pipes are primarily used in irrigation and rural water supply. Both these activities get the maximum attention and fund allocation from Central as well as State Government. The thrust of government in 11th plan period for irrigation coverage under, rural water supply and sanitation etc. is critical booster for increasing demand for PVC pipes. Every year the State Government is spending lakh of rupees on providing these basic facilities to the people and this is likely to continue over the next few decades. As a result the demand for PVC pipes and fittings is bound to keep growing. Moreover, the demand for PVC in housing is yet at a very negligible level but demand is increasing with low cost housing norms. As new applications are being accepted for plumbing, sanitation and rainwater, the demand for PVC pipes in housing is likely to see a quantum jump.

As per 11th Plan numbers, Orissa is aiming at a growth rate of 9 percent of which 4.7 percent is likely to come from agriculture sector. In a plan size of Rs 27,000 crore, irrigation is likely to provide impetus for additional growth to agriculture from its current level.

government programmes is 20%.

The broad objective of the 11th Plan is to achieve a sustainable annual average growth rate of 9%, double agriculture production from the present level. The agriculture sector had exhibited a growth rate of 3% during the first four years of the 10th Plan, higher than the national growth rate. However, additional growth contemplated would only be possible through accelerated irrigation. A component like PVC is an input to irrigation. PVC pipes are widely used in irrigation and water supply systems. Consumption of PVC pipes by oil and gas sector is 50%, construction sector is 30% and


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2.0 Application of PVC Pipes: PVC Pipes of different diameters have widespread application in various fields. The cheaper grey/black pipes with low wall thickness are used for cable ducting and low pressure applications whereas thick walled pipes with threaded ends are used for pressure applications. Their varied uses of PVC pipes are basically in the following areas. 1. 2. 3. 4. 5.

Rural/Urban water supply Agriculture and Irrigation Sewerage Soil & Waste Pipes Electrical & Telephone cable conduits Effluents disposal

3.0 Proposed Project Site a. Transport and Communication – The proposed manufacturing unit should be whithin 25 KMs. from the state capital. For transportation, the connecting national highway should be there so there is less time to transport. b. Better infrastructure – The unit should avail the benefit the other infrastructures available near the capital city c. Skilled person power – Because of the proximity of the site to state capital, skilled manpower should be available for effective utilisation of their skill and knowledge base. Because of the recent growth in technical education, the manufacturing unit can provide a scope to the skilled and trained person powers. d. Economical –approachability and easy communication, transportation and other costs especially in procurement of raw material and pipe supply should be economical in comparison to other situations. e. Land Suitability – The identified patch of land should be suitable for establishment of manufacturing unit with regard to faster set up times of the basic utilities like Power and Water supply.

.4.0 Production Capacity:


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It is envisaged to produce 51000 tonnes of un-plasticised PVC pipes per annum of size range between 20 mm to 400 mm diameter with three machines, having 550 kg/hour, 140 Kg/hour and 200 kg/ hour production capacity. This would facilitate in having a common operator and common ancillary equipment like mixers, chilling plant, compressor, water circulation plant and laboratory testing facilities etc.

5.0 Market Status 5.1 Supply The promoter has made an initial study of the market and have found encouraging potential both in the retail outlets as well as from government/ institutional demand. Due to high cost of steel pipes the PVC pipes consumption is increasing every year by more than 10 % this is not only due to the increase in population, per capita income, urbanization, rural development schemes, communication and electrification etc, but PVC pipes is steadily making inroads into 8.5 lakh tonnes/ annum of steel pipes market every year. A trend which has started emerging is replacement in the demand of steel pipes by PVC basically due to low cost. In this regard, a market survey was conducted in eastern part of the country to understand the production status of the PVC pipes. The observation is reflected below. Orissa Orissa Plastic, Balasore Jaiswal Tube, Balasore Duropipes, Bhubaneswar Mintu Industries, Bhubaneswar Kanta Pipes Total

Bihar 50000 20000 15000 10000 180

T/A T/A T/A T/A T/A

95180

T/A

Assam

Modi Pipes, Patna Trident Tubes, Patna Gupta Poly tubes, Patna Usha Poly tubes, Patna Ashirwad Pipes, Patna Saket Tubes, Patna

2700 1200 480 240 200 200

T/A T/A T/A T/A T/A T/A

Total

5020

T/A

West Bengal

Kamakhya Udyog, Guwahati Luit Asian, Guwahati Brahamaputra Udyog

1800 T/A 1500 T/A 300 T/A

Total

3600 T/A

S. N, Polymer, Siliguri Plastrain,Belghoria Gk Plastic,Hoogly Sudhir Plastic Plastic india, Nadia Polymer Products, Kalyani Pankaj Plastic,Calcutta

8000 T/A 250 T/A 200 T/A 200 T/A 180 T/A 180 T/A 100 T/A

Tripura B.D Pipes, Tripura

1000 T/A

From the above mentioned figures it be may seen that the total production in the eastern regions of five states is less than the production of UNIPLAS in New Delhi or less than the production of Jain tube, Bombay. As estimated, the present level of state production is not sufficient enough to cater to the growing need of the state especially in the context of industrialisation,


urbanisation, programmatic thrust of domestic/private demand for PVC pipes.

government

and

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over

and

above

increasing

5.2 Demand The combined requirement of five states of Eastern region by minor irrigation department alone is 13000 Tonnes/annum. Even if we talk about Orissa, the market size is about Rs 1350 crore in a five year period. Various other departments of government also use PVC pipes under their routine activities such as; 1. 2. 3. 4. 5. 6. 7. 8. 9.

PHD & PWD of State government Telephone department State plans for water supply under minimum needs program State plans for urban water supply schemes Rural & urban housing schemes etc. Water resources Orissa Watershed Development Mission Orissa Construction Corporation Limited [Govt. of Orissa undertaking] Demand created by external aided projects like DFID, WHO, World Bank etc.

The combined requirement of all these sectors along with private sector uses (agriculture, Aqua culture, Industries etc) is estimated to be about 28,000 Tonnes/annum. The PVC industry outlook also highlights the expected multi fold growth in domestic demand in the coming years.

6.0 Demand and Supply Gap: The present demand supply gap in the Eastern region itself is more than 10,000 Tonnes per year apart from the expected demand growth of 10% every year. So, it is obvious that state may fall short in meeting the emerging demand for PVC pipes if manufacturing units are not promoted.


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7.0 Plant and Machinery: The plan will have all indigenous machinery of following specification 1. 2. 3. 4. 5. 6. 7.

Twin screw Extruder – 3 No (550 kg/hr, 200 kg/hr and 140 kg/hr capacity) High Speed Mixer and Cooler-2nos Chilling plant Scrap grinder Lathes Ancillary equipments like printing, socketing etc Centrifuge and Agitator for Solvent Cement Manufacturing.

7.1 Machinary- PROCESS/PLANT DESCRIPTION


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8.0 Machinery Sources

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The proposed machines will be procured from following sources i.e. 1. 2. 3. 4. 5. 6.

Kolsite Klockner and Windsor Ferromatik Milacron Neoplast Blue Star Remi

9.0 Raw Materials The raw materials to be used are; 1. 2. 3. 4.

PVC resin [at 100%capacity] Additives Fillers Pigments

10.0Sources of Raw materials 1. 2. 3. 4. 5.

I.P.C.L DCW Import under O.G.L PINOLEX Vinyl Chemicals Ltd.

11.0Utilities to Manufacture • •

Electricity Connected load

12.0Land, Building and Other Civil Works

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The land required for the unit is 5 acres or 2,17,802 sq feet, out of which 78,315 sq. feet shall be Plinth area as detailed in the Figure below. Large amount of open land is required other than the Plinth area for temporary Storage of Finished goods. The cost of Land being Rs 2,35,000 per acre comes to Rs. 11,75,000 for five acres plus other Application costs involved.The Construction of Buildings and Civil Works will cost another Rs. 62,50,000. The manufacturing unit will have a Process Unit of around 10,000 sq feet, a Raw Material STORE of around 12,500 sq. feet, a Administrative building of 13,000 sq. feet, a Godown of around 10,000 sq. feet. A Finished materials STORE of 13,000 sq feet. It shall also have Staff Quarters, Canteen, Recreation room, Staff room, Temple and Security Room.

13.0Estimated Cost of the Project on PVC Pipes 1.)

MAIN MACHINARY

Sl. No.

Particulars

Total Amount


in Rs. 1

2 3 4 5 6 7 8 9 10 11

Windsor machines KTS 550/400V KTS 200/200V KTS 140e/110 PVC LINE 250 injection Unit C55 PVC LINE 350 injection Unit C70 Suction Hose Machine Belling Machine for SWR fittings Spiral Hopper loader with vibrator Neoplast HSM 500 Neoplast HSM250 Lab Eqpmt. (Deepak) + others Lathes 3 nos.

10,155,528.00 3,776,433.00 2,378,915.00 4,002,174.00 5,177,985.12 2,000,000.00 1,200,000.00 270,698.22 3,402,598.00 1,600,000.00 901,000.00 906,324.04

Cooling tower(paharpur) Compressor Chilling plant 3 nos Bluestar Threading Machine 2 & 4 inch b TOTAL Add:Transport and insurance 4% Total With Transport and Insurance Add:Installation at 2% Total Cost of MACHINARY with Transport and Installation

111,487.00 498,000.00 568,584.72 2,45,69,568 9,82,783 2,55,52,351 5,11,047 2,60,63,400

2 Electricals 3 Construction 4 Others

7662348.144 16977895.02 2999080.602

Transport Vehicles(trucks

5 Rs.11lacs,jeep) 6 Land

1516000 500000 73351594.28

TOTAL Fixed Expenses

Pre Operative Expenses (Office rent, establishment exps. like elec bills, Phone bills, Furniture, Salaries.)

2500000

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Preliminary Expenses: Architecture Consultancy Technology Consultancy Process And Production Consultancy Interior Decoration Total Preliminary and Pre Op Exps

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1000000 500000 500000 500000 5000000

Total Fixed Expenses + Pre Op +Preliminary Expenses=Rs.733,52,000+50,00,000 = Rs. 7,83,52,000 (Total Project Cost)

14.0Means of Finance: All the project cost will be met from own sou rces and Bank Finance i.e. the project cost is contribution of the promoters & Bank Loan.

15.0Employment Generation The proposed PVC pipe manufacturing unit will employ a total of 45 persons at two different levels i.e. 14 persons in the administrative section and 31 persons at the production and operation. There will also be commission based employment of the marketing persons along with daily wage labourers on short term contractual basis. The table reflects the person power in detail with their remuneration.


Sl.

1 2 3 4 5 6 7 8 9

10 11 12 13 14 15 16 17 18

Personnel Designation Administrative Section Managing Director[M.D.] Accounts Officer P.A. to M.D. Office Assistants @ Rs. 6000 per person Computer Operator Store Keeper Security Personnel Peon Sweeper Total

Production Section Works Manager Supervisor Qulaity Control Incharge Skillled Operator Semi Skilled Operators Skilled Mechanics Skilled Electricians Laboratory Assistant Unskilled Workers@Rs. 2500 each Total G.Total

No. of

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Monthly Salary

1 1 1 2 1 1 5 1 1 14

1,00,000 15,000 10,000 12,000 6,000 6,000 15,000 2,500 2,200 168700

1 1 1 8 3 2 2 1 15 31 45

30,000 10,000 12,000 88,000 18000 20,000 20,000 6000 37,500 2,41,500 4,10,200

16.0Profitability In PVC Units, the Profitability is subject to the following three concerns i.e. 1. Availability of continuous power 2. Availability of quality raw materials 3. Taxation policy of the Government In consideration to the above mentioned three points, the solutions proposed are; a) Installation of a captive transformer for running the unit with uninterrupted power


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supply. b) Import of materials, if necessity. c) Being a new industry, there are adequate reliefs regarding taxation available. It is experienced that generally 10% of the total turnover is the net profitability of the unit.

17.0Conclusion: The proposed project is expected to contribute in minimising the demand and supply gap in the state and in the eastern region of the country. The manufacturers are committed to maintain the prescribed national quality standards. The project plan is in conformity with the guideline of small scale industries. In the context, it is worth to mention that the promoter is adequately capable of implementing as well as operating the unit of this size as he has the required experience and expertise.

Pvc Project Report

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