Introduction

In India, Paper bags are the regular consumable item. We can find several uses of these bags in the retail industry. The manufacturing process is easy. Raw meterials are easily available. Also, the business requires very small startup capital. Additionally, it does not require any complex technology. And finally, the market is readily availabe. Because of the biologically non – disposable nature of plastic bags, Government has banned the plastic carry bagsin many cities and urban centers. Here paper bags are fulfilling the gaps in consumer products packaging. Due to these common factors paper bag making has become a very profitable manufacturing oppourtunity for new entrepreneurs.

A paper bag is a bag made of paper, usually kraft paper. Paper bags are commonly used as shopping bags, packaging, and sacks. Standard brown paper bags are made from kraft paper. Tote-style paper bags, such as those often used by department stores or as gift bags, can be made from any kind of paper, and come in any color. Paper bags can be made from recycle paper, with some local laws requiring bags to have a minimum percentage of post-consumer recycled content. Paper bags can be made to withstand more pressure or weight than plastic bags do. Paper shopping bags, brown paper bags, grocery bags, paper bread bags and other light duty bags have a single layer of paper. A variety of constructions and designs are available. Many are printed with the names of stores and brands. Paper bags are not waterproof. Types of paper bag are: laminated, twisted, flat tap. The laminated bag, whilst not totally waterproof, has a laminate that protects the outside to some degree.

Market potential & Strategy

Paper bags market is expected to gain market growth in the forecast period of 2020 to 2027. Data Bridge Market Research analyses that the market is growing with a CAGR of 4.8% in the forecast period of 2020 to 2027 and expected to reach INR 5,96,49,300 Crores by 2027. Increasing demand of single use paper bags in countries is a driving factor for the market growth. Innovating in new design will increase the demand of paper bags products which drives the market. The global paper bags market is witnessing impressive growth, especially due to the rising adoption of sustainable packaging solutions among various industries. Paper bags are light-weight, non-toxic, biodegradable, and recyclable, and are therefore becoming hugely popular among end users, starting from food & beverage to chemical industry. With rising concerns regarding the safety of environment and marine animals, the demand for paper bags is increasing as more people are choosing eco-friendly packaging instead of polythene bags. Furthermore, paper bags are made from locally available materials that saves the export cost. This makes manufacturing of paper bags cost-effective in turn making them highly affordable for consumers. According to Future Market Insights (FMI), the global paper bags market is anticipated to grow at 4.1?GR during the forecast period from the year 2020 to 2030.

Project at a glance

Name & Address of Unit

Paper Bags and Pouches

Your address

Details of unit

Email	:	[email protected]
Phone	:	0000000000
Constitution	:	Proprietership
Total project cost	:	*******
Fixed Capital	:	*******
Working Capital	:	*******
Total Bank loan	:	*******
Promoter(s) contribution	:	*******
Term loan	:	*******

Name & address of promoter(s)

Name		: Proprator
Designation		: Proprator
Category		: General

Project Feasibility Ratios

Debt Service Coverage Ratio (Average)

:1.87

Current ratio (Average)

:2.63

	Year 1	Year 2	Year 3	Year 4	Year 5
Current ratio	1.53	2.06	2.62	3.19	3.76
Quick ratio	1.13	1.56	2.10	2.64	3.18
Interest coverage ratio	3.87	5.55	7.00	9.48	14.71
Debt equity ratio	2.863	2.080	1.528	1.020	0.542
TOL/TNW	3.02	1.45	0.79	0.43	0.21
DSCR	1.65	1.86	1.90	1.94	1.97
Gross profit Sales Percentage %	29.23 %	28.54 %	28.18 %	27.86 %	27.50 %
Net profit Sales Percentage %	10.84 %	10.56 %	11.10 %	11.57 %	11.90 %
BEP in % of installed capacity %	49.90 %	27.12 %	27.12 %	27.12 %	27.12 %
BEP in sales of Rs	2,620,800.00	1,840,695.65	1,972,173.91	2,103,652.17	2,235,130.43
Return On Capital Employed	0.26	0.34	0.34	0.33	0.33

Project Feasibility graph

Net profit Sales %

Quick ratio

Revenue v/s Expense

Expense Splitup

Project Cost

Sl. no	Item	Amount Rs
1	Working Capital	*******
	Total	*******

Working Capital Computation

Sl. no	Item	Amount Rs
1	Consumables / stock in hand	*******
2	Work in progress	*******
3	Finished goods	*******
4	Working expense.	*******
5	Receivables/Sundry debtors	*******
6	Payables	*******
7	Total working capital	*******
8	Own Contribution	*******

Total Yearly Expense

Sl. no	Item	Amount Rs
	Total	*******

Application of Fund

Sl. no	Item	Subsidy %	No.	Rate	Amount Rs
	Total Investment				*******
	Total Subsidy				*******
	Net Investment				*******

Means of Finance

Sl. no	Item	Amount
1	Term Loan	*******
2	Working capital Loan	*******
3	Total loan	*******
4	Term Loan contribution	*******
5	Working capital contribution	*******

Profitability Statement

		Year 1(!*)	Year 2	Year 3	Year 4	Year 5
Revenue from operation
Sales	15.93	*****	*****	*****	*****	*****
Add :
Closing stock		*****	*****	*****	*****	*****
Total		*****	*****	*****	*****	*****
Less :
Opening stock		*****	*****	*****	*****	*****
Stock purchase	7.20	*****	*****	*****	*****	*****
Salary	3.60	*****	*****	*****	*****	*****
Repairs and maintenance charges	0.24	*****	*****	*****	*****	*****
gas	0.12	*****	*****	*****	*****	*****
ELECTRICITY bill	0.12	*****	*****	*****	*****	*****
Total		*****	*****	*****	*****	*****
Gross profit		*****	*****	*****	*****	*****
Less :
Rent	0.12	*****	*****	*****	*****	*****
Telephone/Postal &internet charge	0.12	*****	*****	*****	*****	*****
Total		*****	0*****	*****	*****	*****
Depreciation		*****	*****	*****	*****	*****
Interest on TL		*****	*****	*****	*****	*****
Interest on WC		*****	*****	*****	*****	*****
Total		*****	*****	*****	*****	*****
Profit before tax		*****	*****	*****	*****	*****
Income Tax		*****	*****	*****	*****	*****
Profit after tax		*****	*****	*****	*****	*****

Cash flow statement

Cash Inflow	Pre operative period	Year 1	Year 2	Year 3	Year 4	Year 5
Capital	0.63	*****	*****	*****	*****	*****
Subsidy	*****	*****	*****	*****	*****	*****
Termloan	*****	*****	*****	*****	*****	*****
Profit before tax with interest	*****	*****	*****	*****	*****	*****
Increase in WC loan	*****	*****	*****	*****	*****	*****
Depreciation	*****	*****	*****	*****	*****	*****
Increase in Current liability	*****	*****	*****	*****	*****	*****
Total Cash Inflow	*****	*****	*****	*****	*****	*****
Cash Outflow
Fixed Assets	*****	*****	*****	*****	*****	*****
Increase in Current asset		*****	*****	*****	*****	*****
Interest on TL	*****	*****	*****	*****	*****	*****
Interest on WC	*****	*****	*****	*****	*****	*****
Income Tax	*****	*****	*****	*****	*****	*****
Decrease in Term loan		*****	*****	*****	*****	*****
Drawing	*****	*****	*****	*****	*****	*****
Total Cash Outflow	*****	*****	*****	*****	*****	*****
Opening balance	*****	*****	*****	*****	*****	*****
Net Cashflow	*****	*****	*****	*****	*****	*****
Closing balance	*****	*****	*****	*****	*****	*****

Balance sheet

Liability	Pre operative period	Year 1	Year 2	Year 3	Year 4	Year 5
A. Share holders funds
Capital	*****	*****	*****	*****	*****	*****
Reserve & Surplus	*****	*****	*****	*****	*****	*****
B.Non current Liabilities
Termloan	*****	*****	*****	*****	*****	*****
C.Current Liabilities
Working capital loan	*****	*****	*****	*****	*****	*****
Account payable		*****	*****	*****	*****	*****
Total Liability	*****	*****	*****	*****	*****	*****
Asset
A. Non current Assets
Fixed Assets	*****	*****	*****	*****	*****	*****
B. Current Assets
Inventory	*****	*****	*****	*****	*****	*****
Trade receivables	*****	*****	*****	*****	*****	*****
Cash and cash equivalence	*****	*****	*****	*****	*****	*****
Total Asset	*****	*****	*****	*****	*****	*****

Repayment of Term loan

Year	Installment	Outstanding at the beginning	Principal repayment	Interest	Amount paid	Outstanding at the end
1	1	*****	*****	*****	*****	*****
1	2	*****	*****	*****	*****	*****
1	3	*****	*****	*****	*****	*****
1	4	*****	*****	*****	*****	*****
1	5	*****	*****	*****	*****	*****
\|	\|	\|	\|	\|	\|	\|
\|	\|	\|	\|	\|	\|	\|
5	56	*****	*****	*****	*****	*****
5	57	*****	*****	*****	*****	*****
5	58	*****	*****	*****	*****	*****
5	59	*****	*****	*****	*****	*****
5	60	*****	*****	*****	*****	*****

Debt Service Coverage Ratio

Particulars	Year 1	Year 2	Year 3	Year 4	Year 5
Receipts
a).Net Profit	*****	*****	*****	*****	*****
b).Depreciation	*****	*****	*****	*****	0.30
c).Interest on termloan	*****	*****	*****	*****	*****
Total	*****	*****	*****	*****	*****
Repayments
a).Loan Principal	*****	*****	*****	*****	*****
b).Interest on termloan	*****	*****	*****	*****	*****
Total	*****	*****	*****	*****	*****
DSCR	*****	*****	*****	*****	*****

Depreciation

Particulars	Rate	Year 1	Year 2	Year 3	Year 4	Year 5
Building	*****	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Computers/ Printers /Photocopier/Electronic gadget	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Furniture & fixtures	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Racks & storage/Interior works	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
new item	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
new	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Air-conditioning	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Other investments	00	*****	*****	*****	*****	*****
Less Depreciation		*****	*****	*****	*****	*****
Written down value		*****	*****	*****	*****	*****
Total less depreciation		*****	*****	*****	*****	*****
Total written down value		*****	*****	*****	*****	*****

Conclusion

The project as a whole describes the scope and viability of the Trading industry and mainly of the financial, technical and its market potential.The project guarantee sufficient fund to repay the loan and also give a good return on capital investment. When analyzing the social- economic impact, this project is able to generate an employment of 5 and above. It will cater the demand of Trading and thus helps the other business entities to increase the production and service which provide service and support to this industry. Thus more cyclic employment and livelihood generation. So in all ways, we can conclude the project is technically and socially viable and commercially sound too.

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