PROJECT – BUSINESS PLAN

ENTREPRENEURSHIP

RECYCLING PLASTIC PLAN

CLEAN EARTH RECYCLING (CER)

KORANGI INDUSTRIAL AREA BLOCK- 10
Karachi
TEL: 9250006 – 9
FAX: 9250011
OUR STATEMENT OF CONFIDENTIALITY

The undersigned reader acknowledged that the information provided by the

Clean Earth Recycling in this business plan is confidential; therefore, reader
agrees not to disclose it without the express written permission of Clean Earth
Recycling.

CLEAN EARTH RECYCLING (CER)

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 communicating the existing or projected financial
health of the recycling business. These statements are prepared at the
end of the financial year to assist our business to consistently establish,
meet goals and objectives.

• INCOME STATEMENT:
1. The major category in this statement are revenues and expenses

2. Both revenue and statement are to be recorded in the year they

are earned or expensed, not when the actual cash is paid or
received

3. Revenues: sales revenue, service revenue, and interest revenue

4. Expenses: salaries of executives, staff salaries, R&D expenses,

bad debt expense, depreciation for the current year expense,
interest expense, and income tax expense

• CASH FLOW STATEMENT:

1. This financial statement deals with the cash transactions of the

business in a financial year.

2. Each period for which the cash flow statement is prepared begins
with a beginning cash balance (which may be zero).

3. 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.
TABLE OF CONTENTS

Executive Summary…………………………………………………………….1.0

Industry Analysis ……………………………………………………………….2.0

Future outlook and trends………………………2.1
Analysis of competitors…………………………2.2
Market segmentation …………………………...2.3
Industry forecast…………………………………2.4
Description of Venture…………………………………………………………3.0
Product……………………………………………3.1
Services…………………………………………..3.2
Size of business…………………………………3.3
Office equipment and personnel……………….3.4
Background of entrepreneurs…………………..3.5

Marketing Plan…………………………………………………………………..4.0
Form of ownership……………………………..4.1
Identification of partners………………………4.2
Authority of principals…………………………4.3
Management team backgrounds…………….4.4
Roles and responsibilities of members of
organization…………………………………….4.5

Organization Plan ………………………………………………………………5.0

Form of Ownership …………………….……...5.1
Identification of Partners…………………….. 5.2
Management Team Background …………….5.3
Role and Responsibilities……………………..5.4

Assessment of Risk…………………………………………………………….6.0
Evaluate weakness of business ……………...6.1
New technologies………………………………6.2

Financial Plan……………………………………………………………………7.0
Sources of funds………………………………..7.1
Performa income statement…………………...7.2
Performa balance sheet………………………..7.3
Cash flow projections…………………………..7.4

Appendix…………………………………………………………………………8.0
1.0-EXECUTIVE SUMMARY

• The purpose of the proposed clean earth Recycling Plastic Plan is to

provide resources which seeks to meet the day 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

• Replay Plastics will capitalize on the opportunities in the recycled resin

and packaging Markets through two main divisions: a Recycling Division
and a Packaging Division.

• The sophisticated washing treatment plant installed at premises enables

clean earth recycling to produce high quality plastic raw materials and
plastic products made from hundred percent post industrial wastes.

• 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

Clean earth Recycling is earth friendly and it provides a clean environment to this
part of the world. We firmly believe that it is everyone’s responsibility to recycle
everything they can because 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

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%
or 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, like
baled/fluff/sheet/powder/rolls/others.

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: to avail are as
follows:

45000000
40000000
35000000
30000000
25000000 sales
20000000 gross margin
15000000 net profit
10000000
5000000
0
2009 2010 2011 2012
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 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 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 relatively light competition. 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 to out market segmented audience.

Such services are
• Consulting,
• Size Reduction/Griddling,
• Subcontracting Jobs,
• Fine Separation,
 • Dry Blending.

2.4 INDUSTRY 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 Clean Earth Recycling 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 wide verities 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 Reprocessed Grannules we offer 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 technology leap that breaks the mold. With a Bottle that provides all the
multiple advantages of PET. Its lightweight, it’s shatterproof, and its
recloseable

3.1.5 PLASTIC MOLDED PRODUCTS

One of Clean Earth Recycling main aims is the drive for new and
innovative techniques to provide cost effective solutions. Our house holds
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, 10-15 Accountants, Administration, Sales Rep, Outdoor
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 etc
• Accessories, Papers, Pen, Files etc

3.5 BACKGROUND OF ENTREPRENEUR

• Entrepreneur is currently studying in Bahria University 6th Semester, and
having family history of running different entrepreneur businesses.
4.0 MARKETING PLAN

4.1 PRICING

CLEAN EARTH RECYCLING 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 2009 2010 2011 2012

Recycled Bags 0.30 0.35 0.36 0.40
Recycled Mold Products 4.75 5.75 6.75 7.75
Recycled Bottle 0.50 0.55 0.60 0.65
Recycled Pipes 14.99 16.99 18.99 20.99

Direct Unit Costs 2006 2007 2008 2009

Recycled Bags 0.10 0.15 0.20 0.25
Recycled Mold Products 2.25 3.50 4.75 6.00
Recycled Bottle 0.32 0.35 0.38 0.43
Recycled Pipes 9.50 11.75 12.80 13.17

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 01/06/2009 31/06/2011 Rs.5, 096,256
Banners 01/01/2010 31/12/2012 Rs.1, 553,896
News paper Adds 01/01/2010 01/01/2012 RS.1, 099,153
Brochures 01/01/2010 31/12/2010 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 01/01/2012 31/12/2012 Rs.1, 000,000
Totals Rs.10,100,000
4.4 CONTROLS

Because the Company is a start-up, our milestones will surround the

establishment 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

• Clean earth recycling is owned by the initial founders, students of Bahria

and other investors who are the proposed three executives of the
operating entity.
• The plan was conceived and developed by these individuals, with the
intent to apply their extensive experience and contacts in the industry to
building a successful profitable corporation
5.1.1 START UP SUMMARY

Our largest Start-up Requirement is the building of the recycling and

extrusion 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 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

Bahrain’s, are the active partners, the student studying in Bahria

University 6th Semester. Along with Investors from different part of the
Pakistan enjoying their return for the initial investment they have made to
purchase Bonds of Clean Earth Recycling

5.3 AUTHORITY OF PRINCIPALS

Chief Executive Office along with the Top, Lower and Middle Managers playing
their parts. Also to focus on stakeholder whereas the future Investors.

5.4 MANAGEMENT TEAM BACKGROUND

CLEAN EARTH RECYCLING currently has commitments from customers to

purchase all of the initial production capacity. Excess flake will be sold to outside
customers. All contractual planned and skilled labor from top managers up to
lower plant workers will be higher based on expertise and qualification.
Bahrain, President and CEO, has a history of working in this type of industries
for the last 5 years as a junior and have the capabilities to work with other to
encourage potential hidden inside the plastic business
Mr. Khuwaja Tariq, Investor in Money Market for the last 10-15 years have a
portfolio of more than Rs.1, 000,000 in different securities

Ms. Sarah Zain, SEVP and EVP in Garfield Bank in Forex and Treasury Division
and have the founding that these businesses have potentials in the future to
attract investors.

5.5 ROLES AND RESPONSIBILITIES OF MEMBERS OF RGANIZATION:

PRODUCTION PERSONNEL RESPONSIBILITIES

Shift Supervisor To supervise all day to day operation
and keep it going

MaintainenceTechs To maintain all technical solution arise

from non functionality of
machinery

Skilled Recycle Plant Labor To produce and make it available within

time

Production Assistant (full time) To assist in production issues

Sales and Marketing Personnel To make sales and keep achieving their
targets
GENERAL AND ADMINISTRATIVE PERSONNEL RESPONSIBILITIES

President To make decisions

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 are in high demand, and demand is currently under-

supplied.
• Many manufacturers are delaying expansion because of uncertainty of
supply.
• Entrants would have to consider sourcing post-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.
• The equipment required is costly and very industry specific. It would not
easily be re-sold as a system.
• There is a market for used extrusion equipment, 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 are expensive so entrants will have to consider

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 for virgin resin is 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
ascertained great return.

6.2.2PET FILM & SHEET

The reported market demand (to replace virgin PS, PVC and PET) if
RPET was available is estimated at 1 billion Current pricing for RPET
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 usage of virgin polypropylene is 132 million and of
PET is 108 million. Strapping technology have been advanced
 7.0 FINANCIAL PLANS
7.1 SOURCES OF FUNDS
• Stakeholder
• Shareholders
• Investors
• Money Market
• Financial Institutions

7.2 PERFORMA INCOME STATEMENT

INCOME STATEMENT

Revenue:
Gross Sales 0.00
Less: Sales Returns and Allowances 0.00
Net Sales 0.00

Cost of Goods Sold:

Beginning Inventory 0.00
Add: Purchases 0.00
Freight-in 0.00
Direct Labor 0.00
Indirect Expenses 0.00
0.00
Less: Ending Inventory 0.00
Cost of Goods Sold 0.00

Gross Profit (Loss) 0.00

Expenses:
 Advertising 0.00
Amortization 0.00
Bad Debts 0.00
Bank Charges 0.00
Charitable Contributions 0.00
Commissions 0.00
Contract Labor 0.00
Credit Card Fees 0.00
Delivery Expenses 0.00
Depreciation 0.00
Dues and Subscriptions 0.00
Insurance 0.00
Interest 0.00
Maintenance 0.00
Miscellaneous 0.00
Office Expenses 0.00
Operating Supplies 0.00
Payroll Taxes 0.00
Permits and Licenses 0.00
Postage 0.00
Professional Fees 0.00
Property Taxes 0.00
Rent 0.00
Repairs 0.00
Telephone 0.00
Travel 0.00
Utilities 0.00
Vehicle Expenses 0.00
Wages 0.00
Total Expenses 0.00

Net Operating Income 0.00

Other Income:

Gain (Loss) on Sale of Assets 0.00

Interest Income 0.00
Total Other Income 0.00
Net Income (Loss) 0.00

7.3 PERFORMA BALANCE SHEET

BALANCE SHEET

Current Assets:
Cash 0.00
Accounts Receivable 0.00
Less: Reserve for Bad Debts 0.00 0.00
Merchandise Inventory 0.00
Prepaid Expenses 0.00
Notes Receivable 0.00
Total Current Assets 0.00

Fixed Assets:
Vehicles 0.00
Less: Accumulated Depreciation 0.00 0.00
Furniture and Fixtures 0.00
Less: Accumulated Depreciation 0.00 0.00
Equipment 0.00
Less: Accumulated Depreciation 0.00 0.00
Buildings 0.00
Less: Accumulated Depreciation 0.00 0.00
Land 0.00
Total Fixed Assets 0.00

Other Assets:
Goodwill 0.00
Total Other Assets 0.00
Total Assets 0.00

Liabilities and Capital

Current Liabilities:
Accounts Payable 0.00
Sales Taxes Payable 0.00
Payroll Taxes Payable 0.00
Accrued Wages Payable 0.00
Unearned Revenues 0.00
Short-Term Notes Payable 0.00
Short-Term Bank Loan Payable 0.00
Total Current Liabilities 0.00

Long-Term Liabilities:
Long-Term Notes Payable 0.00
Mortgage Payable 0.00
Total Long-Term Liabilities 0.00

Total Liabilities 0.00

Capital:
Owner's Equity 0.00
Net Profit 0.00
Total Capital 0.00

Total Liabilities and Capital 0.00

7.4 CASH FLOW PROJECTIONS

Cash Flow Budget Worksheet

[Month] Total
Beginning Cash Balance
Cash Inflows (Income):
Accts. Rec. Collections 0.00
Loan Proceeds 0.00
Sales & Receipts 0.00
Other:
0.00
0.00
Total Cash Inflows 0.00 0.00
Available Cash Balance 0.00
Cash Outflows (Expenses):
Advertising 0.00
Bank Service Charges 0.00
Credit Card Fees 0.00
Delivery 0.00
Health Insurance 0
Insurance 0
Interest 0
Inventory Purchases 0
Miscellaneous 0
Office 0
Payroll 0
Payroll Taxes 0
Professional Fees 0
Rent or Lease 0
Subscriptions & Dues 0
Supplies 0
Taxes & Licenses 0
Utilities & Telephone 0
 Other:
Subtotal 0.00 0.00

Other cash out flows:

Capital Purchases 0.00
Loan Principal 0.00
Owner's Draw 0.00
Other:
0.00
Subtotal 0.00 0.00
Total Cash Outflows 0.00 0.00

Ending Cash Balance 0.00

8.0 APPENDIX