Project report for carton box

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Introduction

Project report for corrugated box manufacturing is as follows:

The market for global corrugated boxes stood at USD 61.29 Billion in 2015 and is projected to reach USD 76.76 Billion by 2021, at an estimated CAGR of 3.94%. Globally the corrugated boxes market is gaining momentum in the food & beverages and e-commerce industries. Asia-Pacific is estimated to be the fastest-growing region during the forecast period. Growth in the e-commerce industry is expected to benefit corrugated boxes manufacturing companies in the Asian markets. The growth of the corrugated box market in this region is driven by factors such as the growing food & beverage industry, the rise in demand for packed products, and economic development. 2015 is the base year considered for the study while the market size is forecasted from 2016 to 2021. The primary objective of the study is to define, segment, and project the corrugated box market size on the basis of material, type, printing technology, printing ink, end-use industry, and region. It also provides detailed information about the main factors influencing the growth of the market (drivers, restraints, opportunities, and industry-specific challenges). The market ecosystem involves various stakeholders in the corrugated boxes market. This ecosystem consists of various stakeholders involved in the supply chain of the corrugated boxes industry. It primarily starts with the raw material suppliers who provide the required raw materials to the manufacturing companies.  This is followed by the research & development team as the consumers want better and innovative solutions to their problems which are much more sustainable and environment-friendly. The next level in the chain involves the manufacturing and the assembly team. This is taken care of by the manufacturers. Post this, the marketing and sales of the finished products take place which is only possible if an efficient distribution channel is developed. Finally, the end-product lands with the consumers.

 

Product / Services & process

The firm is focused on manufacturing corrugated kraft paper boxes which are an essential material in packing a product. The need of the product is so among the FMCG, electronics, medical and other related industry.  The targeted customers belongs to the following industry: 

  •     Food & beverage
  •     Electronic goods
  •     Home & personal care goods
  •     Chemicals
  •     Textile goods
  •     Paper products
  •     Others (Pharmaceuticals, rubber, and tobacco)

Corrugated board is made with a corrugated sheet of paper attached to the facing of flat paper, usually kraft by adhesives. In our country, it is mostly produced over a single facer machine here two paper reels are run together, one layer of paper becomes corrugated after passing through the heated rolls and the other is brought into contact with it after the former having glued at the tips. Thus both get pasted together and are wound in rolls. The resulting roll is now known as single face/ corrugated roll/board. By cutting this roll with board cutter and then gluing the corrugated side by a pasting machine and placing 3rd ply of paper over it double faced or 3-ply corrugated board is produced, this board is kept under pressure in a sheet pressing machines for some time for setting of the wet glued sheets. Similarly board can be pasted to form thicker boards i.e.; 5-ply, 7-ply and 9-ply etc.

 

Market potential & Strategy

Paper and paper products are versatile industrial raw materials with a wide variety of application in this era and due to shortage of softwood, wooden packing cases are more and more replaced with corrugated board- boxes and cartons. As more and more materials are coming in paper packing, availability of raw materials are also on the increase. Thus recycling of waste paper is in demand, which can be used to produce products like paperboards, binding sheets, sweet box cartons and other packing cartons.   80% of industrial packaging is done by carton boxes due to effective cushioning, light weight, easy to fabricate, easy for storing, easy for disposal, no strapping necessary, printing and advertising advantages, must in export market, recyclable etc.  Over 12,000 existing corrugated box making units produce nearly 5.2 million tonnes a year of boxes with an estimated market value of Rs 18,000 crore. While 200 automated manufacturing units contribute nearly 40 per cent, about 2,200 semi-automated and partly organised units contribute another 40 per cent. Over 9,500 units in the unorganised sector contribute the rest.

The growth in use of internet for shopping, stimulated by the growing use of smart phones as well as the increasing proportion of tech-savvy consumers, has a positive effect on corrugated demand, since it has direct influence on e-commerce market. Retail ready packaging is also increasing driven by the influence of supermarkets over the retail landscape and supported by their growing share of the retail market will also drive the corrugated box market in future. Inline Automatic board and box making plants will ease out the present semi automatic production processes and deployment of folder gluers, rotary die-cutters will grow in the future. Advances in multicolor, flexo printing will facilitate in-house flexo printing, do away with screen printing and contract printing on offset presses. The trend of colored corrugated boxes has been on the rise. Several organized retailers are using colored and die-cut corrugated boxes for display and promotional purposes in their shops. These types of boxes are mainly used in order to attract customer’s attention as these boxes are very eye catching.

 

PROJECT REPORT

carton box

Address

Introduction

Project report for corrugated box manufacturing is as follows:

The market for global corrugated boxes stood at USD 61.29 Billion in 2015 and is projected to reach USD 76.76 Billion by 2021, at an estimated CAGR of 3.94%. Globally the corrugated boxes market is gaining momentum in the food & beverages and e-commerce industries. Asia-Pacific is estimated to be the fastest-growing region during the forecast period. Growth in the e-commerce industry is expected to benefit corrugated boxes manufacturing companies in the Asian markets. The growth of the corrugated box market in this region is driven by factors such as the growing food & beverage industry, the rise in demand for packed products, and economic development. 2015 is the base year considered for the study while the market size is forecasted from 2016 to 2021. The primary objective of the study is to define, segment, and project the corrugated box market size on the basis of material, type, printing technology, printing ink, end-use industry, and region. It also provides detailed information about the main factors influencing the growth of the market (drivers, restraints, opportunities, and industry-specific challenges). The market ecosystem involves various stakeholders in the corrugated boxes market. This ecosystem consists of various stakeholders involved in the supply chain of the corrugated boxes industry. It primarily starts with the raw material suppliers who provide the required raw materials to the manufacturing companies.  This is followed by the research & development team as the consumers want better and innovative solutions to their problems which are much more sustainable and environment-friendly. The next level in the chain involves the manufacturing and the assembly team. This is taken care of by the manufacturers. Post this, the marketing and sales of the finished products take place which is only possible if an efficient distribution channel is developed. Finally, the end-product lands with the consumers.

Product / Services & process

The firm is focused on manufacturing corrugated kraft paper boxes which are an essential material in packing a product. The need of the product is so among the FMCG, electronics, medical and other related industry.  The targeted customers belongs to the following industry: 

Corrugated board is made with a corrugated sheet of paper attached to the facing of flat paper, usually kraft by adhesives. In our country, it is mostly produced over a single facer machine here two paper reels are run together, one layer of paper becomes corrugated after passing through the heated rolls and the other is brought into contact with it after the former having glued at the tips. Thus both get pasted together and are wound in rolls. The resulting roll is now known as single face/ corrugated roll/board. By cutting this roll with board cutter and then gluing the corrugated side by a pasting machine and placing 3rd ply of paper over it double faced or 3-ply corrugated board is produced, this board is kept under pressure in a sheet pressing machines for some time for setting of the wet glued sheets. Similarly board can be pasted to form thicker boards i.e.; 5-ply, 7-ply and 9-ply etc.

Market potential & Strategy

Paper and paper products are versatile industrial raw materials with a wide variety of application in this era and due to shortage of softwood, wooden packing cases are more and more replaced with corrugated board- boxes and cartons. As more and more materials are coming in paper packing, availability of raw materials are also on the increase. Thus recycling of waste paper is in demand, which can be used to produce products like paperboards, binding sheets, sweet box cartons and other packing cartons.   80% of industrial packaging is done by carton boxes due to effective cushioning, light weight, easy to fabricate, easy for storing, easy for disposal, no strapping necessary, printing and advertising advantages, must in export market, recyclable etc.  Over 12,000 existing corrugated box making units produce nearly 5.2 million tonnes a year of boxes with an estimated market value of Rs 18,000 crore. While 200 automated manufacturing units contribute nearly 40 per cent, about 2,200 semi-automated and partly organised units contribute another 40 per cent. Over 9,500 units in the unorganised sector contribute the rest.

The growth in use of internet for shopping, stimulated by the growing use of smart phones as well as the increasing proportion of tech-savvy consumers, has a positive effect on corrugated demand, since it has direct influence on e-commerce market. Retail ready packaging is also increasing driven by the influence of supermarkets over the retail landscape and supported by their growing share of the retail market will also drive the corrugated box market in future. Inline Automatic board and box making plants will ease out the present semi automatic production processes and deployment of folder gluers, rotary die-cutters will grow in the future. Advances in multicolor, flexo printing will facilitate in-house flexo printing, do away with screen printing and contract printing on offset presses. The trend of colored corrugated boxes has been on the rise. Several organized retailers are using colored and die-cut corrugated boxes for display and promotional purposes in their shops. These types of boxes are mainly used in order to attract customer’s attention as these boxes are very eye catching.

Project at a glance

Name & Address of Unit

Corrugated box manufacturing

Address

Details of unit
Email : youremail@gmail.com
Phone : 0000000
Constitution : Proprietership
Total project cost : *******
Fixed Capital : *******
Working Capital : *******
Total Bank loan : *******
Promoter(s) contribution : *******
Term loan : *******
Working capital loan : *******
Name & address of promoter(s)
Name : Your name
Address : Address
Phone : 000
Designation : Proprietor
E-mail : youremail@gmail.com

Project Feasibility Ratio

Debt Service Coverage Ratio (Average) :1.87
Current ratio (Average) :2.63
Year 1Year 2Year 3Year 4Year 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

Revenue v/s Expense Expense Splitup
 
Revenue
 
Expense
Net profit Sales % Quick ratio

Project Cost

Sl. no Item Amount Rs
1 Rent advance *******
2 Misc Items (Reel Stand rtc.) *******
3 Stitching Machine, 36” *******
4 Slotter, 42” *******
5 4-Bar Rotary Cutting & Creasing M/c, 95” *******
6 Sheet Pasting Machine *******
7 Board Cutter, 62” x 62” *******
8 Weighing machine *******
9 Computer, CCTV, office furnitures *******
10 Firefighting equipment *******
11 Electrification *******
12 Preliminary expenses *******
13 contingencies *******
14 Other expense *******
15 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 *******
9 Working capital loan *******

Annual Sales / Revenue

Sl. no Item Rate Quantity Unit Total Rs
1 Revenue from Sales ******* X 114000 Kilogram *******
Total *******

Total Yearly Expense

Sl. no Item Amount Rs
1 Rent *******
2 Supervisor *******
3 Skilled staff *******
4 Office assistant *******
5 Repairs & Maintanance *******
6 Electricity *******
7 Raw material purchase *******
8 Rider *******
9 Unskilled *******
Total *******

Application of Fund

Sl. no Item Subsidy % No. Rate Amount Rs
1 Rent advance ******* 1 ******* *******
2 Misc Items (Reel Stand rtc.) ******* 2 ******* *******
3 Stitching Machine, 36” ******* 1 ******* *******
4 Slotter, 42” ******* 1 ******* *******
5 4-Bar Rotary Cutting & Creasing M/c, 95” ******* 1 ******* *******
6 Sheet Pasting Machine ******* 1 ******* *******
7 Board Cutter, 62” x 62” ******* 1 ******* *******
8 Weighing machine ******* 1 ******* *******
9 Computer, CCTV, office furnitures ******* 1 ******* *******
10 Firefighting equipment ******* 1 ******* *******
11 Electrification ******* 1 ******* *******
12 Preliminary expenses ******* 1 ******* *******
13 contingencies ******* 1 ******* *******
14 Other expense ******* 1 ******* *******
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 ***** ***** ***** ***** *****
Add :
Closing stock 0.00 0.00 0.00 0.00 0.00
Total ***** ***** ***** ***** *****
Less :
Opening stock 0.00 0.00 0.00 0.00 0.00
Stock purchase ***** ***** ***** ***** *****
Salary ***** ***** ***** ***** *****
Repairs and maintenance charges ***** ***** ***** ***** *****
gas ***** ***** ***** ***** *****
ELECTRICITY bill ***** ***** ***** ***** *****
Total ***** ***** ***** ***** *****
Gross profit ***** ***** ***** ***** *****
Less :
Rent ***** ***** ***** ***** *****
Telephone/Postal &internet charge ***** ***** ***** ***** *****
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 0.00 0.00 0.00 0.00 0.00
Subsidy 0.00 0.00 0.00 0.00 0.00 0.00
Termloan ***** 0.00 0.00 0.00 0.00 0.00
Profit before tax with interest 0.00 ***** ***** ***** ***** *****
Increase in WC loan 0.00 0.00 0.00 0.00 0.00 0.00
Depreciation 0.00 ***** ***** ***** ***** *****
Increase in Current liability 0.00 0.00 0.00 0.00 0.00 0.00
Total Cash Inflow ***** ***** ***** ***** ***** *****
Cash Outflow
Fixed Assets ***** ***** ***** ***** ***** *****
Increase in Current asset 0.00 0.00 0.00 0.00 0.00
Interest on TL 0.00 ***** ***** ***** ***** *****
Interest on WC 0.00 0.00 0.00 0.00 0.00 0.00
Income Tax 0.00 ***** ***** ***** ***** *****
Decrease in Term loan ***** ***** ***** ***** *****
Drawing 0.00 0.00 0.00 0.00 0.00 0.00
Total Cash Outflow ***** ***** ***** ***** ***** *****
Opening balance ***** ***** ***** ***** ***** *****
Net Cashflow 0.00 ***** ***** ***** ***** *****
Closing balance 0.00 ***** ***** ***** ***** *****

Balance sheet

Liability Pre operative period Year 1 Year 2 Year 3 Year 4 Year 5
A. Share holders funds
Capital ***** ***** ***** ***** ***** *****
Reserve & Surplus 0.00 ***** ***** ***** ***** *****
B.Non current Liabilities
Termloan ***** ***** ***** ***** ***** *****
C.Current Liabilities
Working capital loan 0.00 0.00 0.00 0.00 0.00 0.00
Account payable 0.00 0.00 0.00 0.00 0.00
Total Liability ***** ***** ***** ***** ***** *****
Asset
A. Non current Assets
Fixed Assets ***** ***** ***** ***** ***** *****
B. Current Assets
Inventory 0.00 0.00 0.00 0.00 0.00 0.00
Trade receivables 0.00 0.00 0.00 0.00 0.00 0.00
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 0.00 0.00 0.00 0.00 0.00
b).Depreciation 0.00 0.00 0.00 0.00 0.30
c).Interest on termloan 0.00 0.00 0.00 0.00 0.00
Total 0.00 0.00 0.00 0.00 0.00
Repayments
a).Loan Principal 0.00 0.00 0.00 0.00 0.00
b).Interest on termloan 0.00 0.00 0.00 0.00 0.00
Total 0.00 0.00 0.00 0.00 0.00
DSCR 0.00 0.00 0.00 0.00 0.00

Depreciation

Particulars Rate Year 1 Year 2 Year 3 Year 4 Year 5
Building 0.00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
Computers/ Printers /Photocopier/Electronic gadget 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
Furniture & fixtures 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
Racks & storage/Interior works 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
new item 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
new 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
Air-conditioning 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
Other investments 00 0.00 0.00 0.00 0.00 0.00
Less Depreciation 0.00 0.00 0.00 0.00 0.00
Written down value 0.00 0.00 0.00 0.00 0.00
Total less depreciation 0.00 0.00 0.00 0.00 0.00
Total written down value 0.00 0.00 0.00 0.00 0.00

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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