Paper Bag Project Report – Making Plan

Paper Bag Project Report, Making Business Plan in India


Hello friends, today we are here with a new topic called paper bag project report along with making business plan in India. Do you want to start an eco-friendly Paper Bag Making Business? This is a proper period, to begin with, the paper bag-making business because all are aware of the ban imposed on the use of plastic bags across India. The government is taking proper steps in educating common people about threats of plastics and associated materials, and in many regions of India, we see that use of paper carry bags is already there. Here in this post, we will detail business prospects in the manufacturing of paper bags in a country like India.

In this present article, you have an idea of the following aspect:

  • Scope and prospect in this business
  • How to begin a paper bag manufacturing plant
  • What are the essential machines that are needed in the manufacturing business?
  • Main raw materials required
  • Detailed data and information on the paper bag manufacturing process
  • Paper bag project report along with a business plan
  • Estimated Profit and gain in this business
  • Business advertisement and marketing ideas

Paper Bag Project Report, Making Business Plan in India

Paper Bags
Paper Bag Project Report, Making Business Plan in India (Image source: pixabay)

Market potential for Paper Bag Making business

In the current society, paper bags have been the fashion statement for individuals in India and abroad. The demand for eco-friendly paper bags is growing exponentially throughout the county and it will remain to rise in the coming future. After initiating the ban on the use of paper bags in Tier-1 regions of India such as Delhi, Bangalore, Mumbai, Chennai, Hyderabad, etc. In coming years, they are even expanding to impose a ban across India. With all these current states in the country, we hope that you can now analyze the scope and prospect of this business. Besides this, paper carry bags are less expensive and it plays a significant role in cleaning nature and it is effortlessly recyclable as compared to unsafe plastic carry bags. This is a very great chance to earn income from this business and even protect the environment simultaneously.  The use of paper bag as a common packaging material is now clearly visible in the following places:

  • Shopping Malls
  • Stationery stores
  • Grocery stores
  • Fruits and vegetable stores
  • Medical stores

Setting up a Paper Bag manufacturing unit

In this section, you will acquire awareness on how to start a paper bag manufacturing unit. We have included the methods of choosing a location, necessary raw materials, and machines needed for manufacturing, etc.

Area required to start Paper Bag manufacturing unit

Choosing a location is very significant in any business. You have to consider few aspects before finalizing the location as it cannot be reversed once you install the machinery.  These are the major aspects to be considered while choosing a location.

  • It should be near from the market so that you can easily sell products
  • Space for unloading (raw materials) and loading (packed materials) into the trucks

Presence of workers in that locality. If labor cost is low then it is a great advantage for you

  • Power supply
  • Water Provision

License, registrations, and permissions required to start Paper Bag Making business in India

Below is the list of licenses required to start Paper Bag Making business

  • GST
  • PAN Card
  • Pvt Ltd company registration
  • Aadhaar Card
  • Trade License
  • BIS registration
  • ISI Mark ­­­­­
  • FSSAI registration
  • Shop Act License
  • Udyog Aadhaar Registration
  • No Objection Certificate from State Pollution Control Board

Machinery required to start Paper Bag Making business

Different types of machines are there for paper bag making on a commercial scale, some can be automatic machines and a few are semi-automatic only. The cost of automatic machines differs from 5 lakhs to 20 lakh rupees. The price mainly is determined by the motor speed which is directly proportional to production yield.

Production capacity with an automatic machine is around 10,000 pieces in an hour without printing. As is evident that the machine with dual-color printing arrangement takes more installation area because it has one extra printing unit attached to it. There are various other types of machines are available in the market and the price for that machines varies based upon additional features like laminating, packing, printing, multi-color printing, etc.

Raw materials required to start Paper Bags Manufacturing business

Paper bags can be prepared from different types of papers present in the market. You have to determine that what type of paper you are willing to use for manufacturing paper bags. The different paper offers different strengths, if you are manufacturing paper carry bags for clothes then the quality must be high as compared to carry bags for transporting small things like lightweight grocery items, medicines, etc.

The main raw materials required for manufacturing are as mentioned below.

  • Paper roll (You can purchase it from a paper mill)
  • Printing ink is needed for designing and for logos printing
  • Gum
  • Strings

Procedure to start Paper Bag Manufacturing business

You may also check this: Seed Food Processing Business.

Procedure to start Paper Bag Manufacturing business
Procedure to start Paper Bag Manufacturing business (pic source: pixabay)

The manufacturing of paper bags is entirely automatic and easy. A person can easily operate one machine for production. Usually, when all things are fed into the machine then you do not have to do perform anything just wait and see till machine stops. The process of manufacturing is stated in the next section:

  • Cutting the paper as per size is done with an automatic paper bag machine
  • Pressing the side of the paper using gum is done with a pressing machine
  • Next, printing is performed by printers
  • Punching is performed for making holes for strings
  • Attaching strings to hole is automatically performed

Investment required to start Paper Bag Manufacturing business

Fixed Capital

Land and building requirement: Rs. 3,00,000

Machinery and equipment: Rs. 5,00,000.

Working Capital

Salaries and wages: Rs. 28,300

Raw materials: Rs. 2,79,000

Utilities: Rs. 4,000

Other Contingent Expenses: Rs. 9,000

Total Recurring Expenses: Rs. 3,20,000

Working Capital Requirement for 3 months: Rs. 9,60,000.

Total Capital Investment

Fixed capital: Rs. 8,00,000

Working capital: Rs. 9,61,000

Total: Rs. 17,61,000

Cost of production (per year): Rs. 40,00,000

Turn-over /Sale: Rs. 45,00,000.

Profit in Paper Bag Manufacturing business in India

Production cost for 1 paper bag having dimension 18cm x 25cm is about Rs. 3.40/- including resources cost and workers expenses. The market selling price of 1 piece paper bag is about Rs. 3.50. Thus, you can see that by 1 piece of a paper bag, you will earn 0.10 paise.

The above profit margin could change and based on production quantity and proper utilization of equipment.

Net profit = Rs. 45,00,000 – Rs. 40,00,000  = Rs. 5,00,000

Net Profit Ratio = Net Profit Per Year x 100/Turn-over per year = 5/45 = 11.11%

Rate of Return = Net Profit Per Year x 100/ Total Investment = 5/16.2 = 30.17%.

Break Even Analysis

Depreciations on building: Rs. 7,50,000

Dep. (all other types): Rs. 4,40,000

Interest on investments: Rs. 1,94,000

Insurance: Rs. 60,000

40 % of salaries & wages: Rs. 1,51,000

40 % of O.Es. less insurance: Rs. 40,000

Total: Rs. 4,43,500

Net Profit per year: Rs. 5,00,000

Break Even Point (BEP): Fixed Cost x 100/Fixed Cost + Net Profit = 52.08%.

Marketing strategies to promote your Paper Bag Manufacturing business

You can apply with some websites like,, etc. Also, the popular Facebook, Instagram could be great platforms to advertise your business online. It is also essential to have a website for your business. You can also approach paper bag dealers and can send your products directly to them.



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