Jute Bag Manufacturing Project Report - Business Plan

Jute Bag Manufacturing Project Report and Business Plan in India

Hello friends, we are here today with a new topic of Jute Bag Manufacturing Project Report and Businss Plan.

Introduction

Are you planning to start a jute bag manufacturing business on a small scale probably from home? Check this interesting blog about jute bag making that includes a business plan with the manufacturing method, expenses, equipment, raw materials, etc.

If you see jute is a long, shiny, and soft vegetable fiber. It is also famous as ‘Golden fiber’. At present, it is one of the toughest of all-natural fibers obtainable throughout the world. Also, the jute fiber can be used again and again with the advantage that it is biodegradable.

Jute fabrics are strong, light, durable, attractive, and cheaper than other fabrics made from other fibers. Apart from that, these are anti-static and UV protective. Therefore, jute fabrics are the perfect raw materials for making jute bags.

The jute bag-making steps are easy. Additionally, there are many variations in the bags that are very widespread in the market. Moreover, the business needs a very small startup investment. It can be initiated even from home. Furthermore, it is a great revenue-generating opportunity for women, housewives, etc.

A guide to Jute Bag Manufacturing Project Report, and Business Plan in India

Market potential of Jute Bag Making Business

There are various types of jute bags which are seen nowadays in the market. According to the lining, there are majorly three different types –

Unlaminated – Biodegradable
Laminated – Food Grade LDPE, wipe clean, splash resistant,
Muslin Lined
Besides, a jute bag comes has been seen with a wide range of handle options. They are-
Jute Handles
Flat Cotton Strap
Cotton webbing, filled with rope
Cane Handles
Drawstring
Rope with eyelets
According to the use, there are various jute bags available. They differ in pattern, size, and color. These are
Calico Bags
Jute Carry Bags
Shopping Bag
Conference Bag
Ladies Purse
Designer Bag
Jute Conference Bags
Promotional Bag
Jute Drawstring Pouches
Jute Wine Bottle Bags
Juco Bags

Decorated jute bags and shopping bags are fast selling both in domestic and international markets. With the rise in population, the scope of business and industry expansion is also possible.

As bags are a significant item for humans, so the need for the product is steady in the market. So, the demand will be steady throughout the year. Hence it is projected that there is a good scope for the opening of such type of business with great export potential.

Starting a Jute Bag Making manufacturing business in India

In case if you miss this: Small Business Ideas with Low Investment.

Identify the demand

This is the most essential element you have to consider before starting a business. You must recognize the demand for the specific kind of jute bag in the local shops. Additionally, check the selling price, who are the manufacturers, and their marketing strategies. These all will aid you in preparing the business plan and beginning your jute bag-making business.

Design a perfect Jute Bag Making business plan

Even, if you begin the business on a small- scale like from home, then also you have to prepare a business plan. And your business plan must have a financial projection and analysis of startup expenses and marketing ideas. Also, include your business mission, target audience, and marketing ideas. As a jute bag owner, you should be in a position to deliver the right product at the proper cost to the potential consumer.

License, registrations, and permissions required to start a Jute Bag making business

You must register the business with ROC as per the structure of your business organization. Being a small startup, you can plan for a proprietorship type of organization. However, you even try with partnership, LLP, or INC companies as per your business and investment plan.

Usually, this type of business might not have any particular licenses from the Government authorities. However, verify with local rules and guidelines before beginning the business. Also, you check the need for upcoming tax liabilities as well.

Cost required to start Jute bag making business

Generally, the business must invest money for obtaining machinery, raw materials, and other properties including staff. Besides, you will be spending on marketing and distribution works. If you are starting it on a small scale, then it is recommended to start with savings. For large-scale set-up, you can plan to avail bank loans or contact venture capital investment.

Setting up a Jute Bag making business unit

For the jute bag-making unit around 500 sq ft of an area is enough. However, you must make the connection for electricity supply for operating the equipment. After choosing the area, you must design a floor plan. This is essential to allocate the entire space for the storage, production area, and admin area. You should keep someplace for office work that is needed to money receipts, raising invoices, etc.

Machinery required to start Jute Bag Making business

Though the jute bag-making business will not need any heavy machinery. There is some important machinery mentioned here for your easy reference.

Wooden Printing Table
The screen of Different Design
Rubber Wiper
Dye Paste Stirrer
Water Drum
Electric Fittings
Cutting Table
Wooden Working Table
Cottage Steamer
Tubes, Clips, Steel Spoons, Mugs, Roper, Bucket, Stools, etc.
Lock Stitch Machine
Scissors, Measuring tape and other Equipment

Raw materials required to start Jute Bag Making business

The chief raw materials for decorated and printed jute shopping bags are jute fabrics. Moreover, you must obtain the dyestuff, chemicals, printing gum, and auxiliaries. Also, you might need a PVC buckle and bamboo sticks, packing materials, sewing thread, labels, etc. You can obtain the raw materials very easily at the wholesale market for a reasonable price.

Procedure to start Jute Bag Manufacturing Process

First of all, you will have to procure the woven jute fabric by purchasing from the wholesale market or directly from manufacturers. Spread them on the printing surface and fix the necessary components.

Then you will have to print it by screen printing based on the design and color. After that, clean the printed fabric and make sure you dry under sunlight or by drier.

Then cut the printed fabric according to the planned design and sizes of the bag. Stitch the cut pieces using the lockstitch machine. Then, manually you have to attach the PVC buckle or bamboo stick, etc. Now the bags are complete for selling.

Quality control and specifications in Jute Bag Making

IS: 6753- – 1981 is for the fertilizers

IS: 8069- – 1981 is for the pesticides

HDPE woven sacks can also be manufactured according to the need and major customers.

Marketing strategies to promote your Jute Bag Manufacturing Business

Promotion is a very essential aspect of any product when you start a new business. Similarly for jute bags as well we have to check out various strategies to advertise the bags. Commonly, retail distribution is the conventionally used method to bring any product to the market. However, you have to consider the sales from various companies as well by following specific techniques.

Besides the traditional offline promotion, it’s important to focus on the online platforms as well in this technology era. You can plan to purchase a domain name that could suit your brand name and build a beautiful and appealing website. Also, register with social media like Facebook, Instagram, etc. for marketing your jute bag extensively.

Financial aspects in Jute Bag Making business

A: Fixed Capital:

Land & Building:

Workspace 1200 sq.mtrs on long term monthly rental basis Rs. 1800

Plant and Machinery:

a) Wooden Printing Table Rs. 25,000

b) Screen of Diff. Design Rs. 1,05,00

c) Rubber Wiper Rs. 1,250

d) Dye Paste Stirrer Rs. 14,400

e) Water Drum Rs. 3,800

f) Cottage Steamer Rs. 16,500

g) Tubes, Steel Spoons, Mugs, Bucket, Roper, Clips, Stools etc. Rs. 6,800

Total Rs. 78,250

Stitching Section:

a) Lock Stitch Machine Rs. 28,200

b) Wooden Working Table Rs. 4,000

c) Cutting Table Rs. 1,800

d) Electric Fittings Rs. 4,500

e) Scissors, Measuring tape and other Equipments

Rs. 2,800

Total Rs. 41,300

Total Machinery Rs. 1,19,550

Furniture and Fixture:

Office furniture like almirah, table, chair, rack etc. Rs.12,500

Total non-recurring expenditure/ fixed

Capital: Rs. 1,32,050.00

Working Capital per month:

Monthly expenses for Salary & Wages:

Manager cum Supervisor Rs. 3,000

Clerk cum-Accountant Rs. 2,000

Salesman Rs. 4,000

Peon/ Chowkidar Rs. 1000

Master Printer/ Designer Rs. 2,500

Master Cutter Rs. 2,200

Stitching Machine Operator Rs. 9,000

Skilled Printer Rs. 6,000

Unskilled Worker Rs. 6,000

Sum Rs. 3,5700

Add: Perquisite @ 20%: Rs. 7,140

Total Rs. 42,840

Raw Material Consumption per month: Rs. 1,0,8150

Monthly Other Expenses: Rs. 8,800

Total Working Capital per month: Rs. 1,59,790

Total Working Capital for 3 months: Rs. 4,79,370

Total Capital Investment: Rs. 6,11,420

Financial Analysis:

Cost of Production per year:

1. Total Recurring Expenditure Rs. 19,17,480

2. Depreciation on Plant & Machinery @ 15% p.a. Rs. 17,933

3. Depreciation on Furniture @ 10% p.a. Rs. 1,250

4. Interest on total Capital Investment @ 12% p.a. Rs. 73,370

Total Rs. 20,10,033

Turnover per year:

Printed & Decorated Jute Shopping Bags Rs. 26,25,000

Total Turnover (incl. tax) Rs. 26,25,000

Net Profit per year:

Turnover per year – Cost of production per year

= Rs. 2625000.00 – Rs. 20,10,033.00 = Rs. 6,14,967.00

Profit Ratio on Sale = 614967 x 100/2625000 =23.43%

Rate of Return = 614967 x 100 / 611420 =100.58%

Break Even Point Analysis:

Fixed Cost

1. Depreciation on Plant & Machinery Rs. 17,933

2. Depreciation on Furniture & Fixture Rs. 1250

3. Interest on Total Capital Investment Rs. 73,370

4. Rent Rs. 21,600

5. Insurance Rs. 18,000

6. 40% Salary & Wages Rs. 2,05,632

7. 40% of other expenses excluding rent & insurance Rs. 42,240

Total Rs. 3,80,025

Beak Even Point = Fixed Cost x 100/Fixed Cost +Profit = 3,80,025 x 100/3,80,025+6,14,967 = 3,80,02,500/9,94,992 = 38.19%.

Jute Bag Manufacturing Project Report – Business Plan

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