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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

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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.
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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).
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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.

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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 2009-10 2010-11 2011-12


position
Finance manager 1 1 1

Sales manager 1 1 1
Asst.Sales - - 1
manager
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 name-
• Memorandum of Association-
• Article of Association-
• Certificate of Incorporation-
• Tax 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 Amount Rs.
Fixed assets requirement 1702000
Working capital requirement 2271000
Total 3973000

Capital sources
Particulars Amount Rs.
Promoters contribution 2200000
Bank Loan 1800000
Total 4000000

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Projected Cost Sheet
Amt. in Rs.
Particulars 1st year 2nd year 3rd year
Direct cost 27888000 41886000 66162000
Administrative overheads 1758600 2207180 2704462
Selling overheads 2298600 3067180 3904462
Total Cost 30186600 44953180 70066462

Profit at 6 % 1811196 2697190 4203987


Sales 31997796 47650370 74270449

Selling Price Per Unit 4.45 4.00 4.15

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Projected Trading & P&L
A/c
Amt. in Rs.
Particulars 1st year 2nd year 3rd year
Net sales 31997796 47650371 74270448
Gross Profit 4304044 5750696 8521470
Depreciation 120200 157180 141462
Indirect Income 37500 37500
Net Profit 1367808 1831061 3255906

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Projected Balance Sheet
Amt. in Rs.
Particulars 1st year 2nd year 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
Amt. in Rs.
Particulars 2009-10 2010-11 2011-12
Total Inflow 40210839 74515952 109500464
Total Outflow 40190075 74453852 109473387
Net Inflow 20764 62100 29900

Discounted cash flow


Amt. in Rs.
Statement
Particulars
Amount Rs.
Total Discounted Cash Inflow 40162089
Discounted Cash out flow 4490860
Net Present Value 35671229

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Ratio Analysis
Particulars 2009-10 2010-11 2011-12
Current Ratio 1.36 : 1.65 : 1.56 :
1 1 1
Quick Ratio 0.78 : 1.09 : 1.08 :
1 1 1
Debt Equity Ratio 0.60 : 0.52 : 0.37 :
1 1 1
Gross Profit Ratio 13.45 12.07 11.47
% % %
Net Profit Ratio 4.27% 3.84% 4.38%

Working Capital 14.09 11.53 14.62


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Inventory TOR 8.86 13.32 16.92
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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Thank You
???

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