Matchbox Making Project Report, Business Plan In India

Matchbox Making Project Report, Business Plan in India

Introduction

Hello budding preneurs! we are here to share the Matchstick Manufacturing Detailed Project Report after a project analysis, which is developed based on deep market analysis other required information or data that will help avail Bank loan, or any grant from Government Sponsored Scheme, etc.

In our guide, you will see a detailed and accurate level of estimate as per the banking guidelines, acceptable to every bank, Non-Banking Financial organization, Government institutions, and other financial agencies, etc. These reports are having very clear descriptions, they are readable and relevant.

A guide to Matchbox making project report along with the business plan in India

Matchsticks are very beneficial and commonly used to fire. They are used in the kitchen to light stoves like gas or kerosene stoves and even cookers. Few other uses are like starting a hearth, lighting industrial burners, campfire, or candles. Matchsticks are made from plastic material or wood such as cardboard strips. Matchsticks are mainly used for domestic works such as cooking purposes.

As matches are used in almost every home and several industrial units, the requirement for matches is growing. Any individual can start the matchstick manufacturer on small scale by taking all the necessary safety measures properly.

Business plan for starting a Matchbox making business

Match production needs wood because it is the major component. The wood must be cut into fine little sticks, and some particular chemicals must be added to the sticks to make sure continuous ignition and burning. For inflammation, the sides of the matchbox adhere to a phosphorus and paraffin mixture.

When the wood is easily available, it is convenient to initiate your match production factory, since it is the main component.

There are two main kinds of matches:

Safety matches: These can only produce fire while rubbing against the special edge on the matchbox. They are common and cheap.

Strike-anywhere matches: These can ignite while rubbing against any frictional surface. Being the widely used and common one, the safety matches are to be discussed here.

Now, let’s see the steps included in initiating a match stick production company.

Location required for Matchbox making business

Choosing the proper location is enormously critical for this business. You must have a suitable location for your matchstick production business. It is recommended to select a location where potential clients or individuals and dealers can easily reach.

Though obtaining the property to accommodate your business has its benefits, it’s going to be expensive especially if you don’t have much capital or savings. So, suggested simply rent the property or even plan to lease initially then after expansion of business plan for a purchase.

Matchstick manufacturing is mainly on handling hazardous and explosive chemicals. It is acclaimed to line the unit in an industrial region. Otherwise, it is mandatory to get ‘NOC’ from the residents of that locality.

Registration, permissions, and licenses required for Matchstick Manufacturing Business

Identify the legal pattern of the business. If you are a single owner and as a start-up, you can proceed as a sole proprietorship on a small scale with less investment. Get ‘consent to establish’ and ‘consent to operate’ approval from the PCB. It is necessary to get permission from the fire division. Avail a factory license from the concerned Government organization. Focus on the safety and fire precaution procedure. It’s necessary to get GST Registration nowadays for any business and so the Matchstick manufacturing business is not an exception.

Machinery and raw materials required for Matchstick Manufacturing Business

Begin your production unit with a semi-automatic process. Initially, matchstick production was done with manual labor. Now various types of modern machinery are there for the production of a matchstick. The process can be a semi-automatic or automatic process. Try to obtain training from the equipment suppliers.

Raw materials are

Potassium chlorate
Sulfur
Starch
Glue
Red phosphorus
Powdered glass
Wood
Thick paper
Colour printer
Packaging paper
Sticker paper

It is essential to examine the reviews before the purchase of the equipment from any supplier. The chief raw material will be a wooden stick. Other raw materials such as potassium chlorate, glue, Phosphorus sesquisulfide, color dye, etc. are necessary. Apart from that, you must acquire an outer box for packaging. You can obtain from reliable dealers at a reasonable cost.

Suppliers of raw materials for Matchbox making business

Apart from wood, which is that the chief material utilized in matchstick production, it is important to obtain the chemicals for processing and flaming, along with paper boards for inner and outer packaging. Aspen, Poplar, and Pine are the varieties of wood usually used for producing match splints. Being the owner, it’s your choice to determine what kind of wood could be used in your company.

Manufacturing Process of Matchbox

There are mainly five steps for manufacturing safety matches.

Cutting Matchsticks

For the wooden matchsticks, you must get a log of white pine or aspen wood. Then the bark is peeled off. The raw wood is then sliced into desired pieces. If you are doing for commercial purpose on large scale, there are machines which could be used for this stage.

Preparing Matchsticks

The matchsticks after properly cut are soaked in a dilute solution of ammonium phosphate. After soaking the sticks are then sent for drying and cleaned in a rotating drum. The cleaned and dried sticks are then sent to the place where matchheads will be formed.

Forming Match Heads

The next process is to wrap up one end of the matchbox using a chemical mixture as mentioned above. After the treatment process of coating is done, the matchstick with the coated match head is left for 1-hour drying.

Preparing the Matchboxes

The matchboxes are commonly made of cardboard. They are produced and printed and stored in a separate place. The side of the safety matchboxes is coated with the chemical solution (mentioned previously).

Packaging of Matchstick

In a different region, the matchbox inner and outer portions are made with cardboard. The cardboard is cut, folded, printed, and attached with the gum. On one side of the box, the chemical strip is applied automatically with adhesive. Once matchboxes are dried, they are sent to the packaging region. Now finished matches are sent out from holes with the help of multi-toothed wheels.

Thereafter, matches are placed in the hopper that is responsible for the number of matches in each box, and from the hopper, they are dumped in cardboard boxes and this move along a conveyor belt that is placed below the hopper. Now, matchboxes moved using another conveyor belt to equipment which collects them in corrugated boxes for transportation.

Arranging finances for Matchbox making business

When you are in a search to find finance for your matchstick business, your business project plan will be very significant to avail the capital needed. After preparing your business plan, the next step will be to source the necessary funds.

When you are not able to arrange any capital for the start-up capital all by yourself, you may think about your family and friends, seeking their support. Even you can get the contact of some investors from relatives and even apply for start-up business loans for which it is important to visit banks or government agencies. The business plan should depict the proper estimate of the business and evaluate the expected returns.

Matchbox making project report/Economics/Financial aspects of Matchbox making business

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Land and building:

Land: 5000 sq. ft. Own.

Shed: 500-sq. ft. Own

A. Fixed Capital:

Machinery and equipment Rs. 22,000

Other exp. Rs. 8,000

Total Rs. 30,000/-

B. STAFF AND LABOUR P.M.

1. Salesman 1 no. = Rs. 3000

2. Skilled labour 2 no. = Rs. 4000

3. Unskilled labour 4 nos. = Rs. 4000

4. Accountant cum storekeeper 1 no. = Rs. 2500

So, total is Rs. 13,500

C. UTILITY:

1. Electricity Rs. 500

2. Water Rs. 100

So, total is Rs. 600

D. Other expenditure

1. Travel Rs. 1500

2. Telephone charges Rs. 300

3. Sale tips/Advt. Rs. 2000

4. Taxes Rs. 200

5. Other misc. exp. Rs. 1000

So, total is Rs. 5,000

Working capital P.M.

A + B + C + D = Rs. 61,300/-

Total capital investment

Fixed capital: Rs. 30,000

Working capital for 1 months: Rs. 61,300

Total Investment required is Rs. 91,300/-

Cost of production per annum:

1. Dep. on machinery and equipt.@ 10%: Rs. 2,000

2. Interest @ 12%: Rs. 10,956

3. Total recurring expenses: Rs. 7,35,600

So, total is Rs. 7,48,556

Turnover (p.a): 1,20,000 pkts. @ Rs. 6.50 = Rs. 7,80,000

PROFIT: Rs. 7,80,000 – Rs 7,48,556 = Rs. 31,444/-

Net profit ratio: Profit x 100 = 4% Turnover

Rate of return: Profit x 100 = 34.4% Invt.

Break even analysis of Matchbox making business

Depreciation of Machinery and Furniture @ 10% = Rs. 2,000

Interest @ 12% = Rs 10,956

40% of Salary = Rs .64,800

40% of other expenditure = Rs 27,840

Total = Rs. 1,05,596

Break Even Point = Fixed Cost x 100 / Fixed Cost + Profit = 77%.

Marketing strategies to promote Matchbox Manufacturing Business

As matchsticks are durable consumer goods, it requires extensive promotion to urge the market share. Matchsticks got to sell in volume. The success of this business is based on the network in the market. It is recommended to initiate selling locally. Offer your dealers irresistible business deals.

Craft out a marketing plan for your business. There are numerous low-budget marketing ideas for stimulating your products. Creating a website will aid you in providing authenticity among clients about your company.

Once everything is set, you can begin production. At the same time, you can even initiate the advertising of your business to potential consumers and try with proven marketing policies that will rapidly spread the word associated with your matchstick production business.

In this business, you have to focus on the standard of the item and its packaging. Establish business relations with the retail brands. Make sure the product is distributed and you contact every store nearby to keep your product.