Paper Bags Project Report, Business Plan

Introduction to Paper Bags Project Report, Manufacturing Business Plan: This article includes a sample paper bag-making business project plan and clearly explains the business plan, market scope, raw materials, required machinery, and production procedure.

Paper bags are a frequent consumable product. You can see several applications of these bags in the retail business. The manufacturing procedure is easy. Raw materials are even simple to procure. Even, the business demand low start-up capital as the unit does not require some complex technology for the process. The main fact is that you need not create the market as it is already available.

A guide to Paper Bags Project Report, Economics, and Manufacturing Business Plan

As it is well-known that the Government has imposed a ban in many regions for using plastic bags for their non-biodegradable nature. Here, paper bags are excessively being used as a substitute for paper in consumer product packaging. Due to these major impacts, paper bag making has become a money-spinning and lucrative manufacturing venture to start for young entrepreneurs.

According to the requirement and production scope, you can take the step as a small-scale manufacturing unit or on a large scale.

Business plan for starting Paper Bag Making Business

Before starting Paper Bag Manufacturing Business, you need to craft a perfect business plan by considering the following points.

  • Market demand of the paper bag
  • List of approvals required for starting the business
  • Raw materials and machinery required
  • Manufacturing process
  • Project economics
  • Marketing strategies to promote the product

Market potential of Paper Bag Manufacturing Business

Paper Bag Manufacturing Business
Paper Bag Manufacturing Business (Image source: pixabay)

Paper bags are regularly used packaging stuff nowadays after the ban as we have stated previously. Generally, bakers and sweet shops, textile and cloth merchants, grocery owners, dry cleaning shops, meat dealers, etc. require these on daily basis. The item has some distinct benefits particularly less cost over the other traditional packaging material. Even, the hawkers and vendors on the footpath now have started packing fruits, vegetables, and candies, for their items.

Paper carry bags are extensively used in various types of trade. Some of the chief businesses are textile shops, bakeries, grocery shops, chappal shops, fancy shops, bookshops, sweet shops, meat/fish stores, vegetable stores, stationery and hardware shops, all departmental shops, and consumer stores.

Even the awareness of the impact of plastic bags on the environment is growing among the public. Thereby, it is the driving force for the huge demand for eco-friendly bags. The Eco-friendly paper bag manufacturing business is projected for higher growth shortly.

Most famous and highly in demand paper bags sizes:

Size in Inches Sizes in cms
25X 6 11X15
25X7.5 13X19
25X10 21X25
75X12.75  25X34
5X16   25X34

Paper Bag Manufacturing Project Report

After determining the specific type of bags that you plan to manufacture, you have to prepare the project plan. A customized project plan not only assists in acquiring bank loans but also assists in setting up the business properly with fewer risks.

A project report comprises majorly two segments. One is the technical section and the other is the financial part. The technical part includes raw material information, production technology, machinery, etc. On the other hand, the financial aspect includes the project expenses and revenue analysis.

List of licenses required to start Paper Bag Manufacturing Business

Initiating this business demands business registration. If you plan to start as a proprietorship company, then a Trade License is appropriate. However, for LLP or Private Ltd company, you must incorporate the business with ROC.

Plan for Udyog Aadhaar MSME online registration. Avail of the GST registration for tax filing. And lastly, you will need to get the BIS certification. Generally, paper bag manufacturers produce bags based on the customer’s needs. However, you should be careful and maintain the BIS IS 10106: Part 2: Sec 2 in the final product.

Area required for establishing the Paper Bag Manufacturing unit

Now, you have to pick a location for the factory. If you have your land, you can set up the unit on that as well which will save the expenses. However, it is always sensible to begin a business in an industrial area.

About 500 sq. ft. covered region is appropriate for the factory operation. If you don’t have your own space, then acquire a rental area. In that case, that space should have electricity connection, water provision, and easy transportation possibilities.

Establishing the Paper Bag Manufacturing unit

After acquiring the area, prepare a floor plan. You can consider assistance from an interior designer with proper expertise in designing industrial establishments. Along with that, you must connect the machines with the electrical supply. Allocate appropriate space for machinery installation, storing raw material, and admin works. Also, allocate some area nearby the front door for unloading and loading works.

The machinery required to start Paper Bags Manufacturing Business

List of equipment and machinery required for manufacturing paper bags.

  • Stereo Press
  • Eye letting Machine
  • Bag cutting machine
  • Stereo Grinder
  • Rolls slitter motorized machine
  • Testing equipment scale, etc.

First of all, you must get the power and fuel based on the necessity of the business. The unit might consume around 30 KW load. Apart from that, you have to keep arrange for a water supply of about 50KL per annum. The water is needed for film washing, developing, drinking, etc.

Raw materials required to start Paper Bags Manufacturing Business

You must take care of the mentioned raw materials before initiating the paper bags making process:

  • Paper sheets 40”x60”, about 18000 sheets in a number
  • Paper in Roll colors & white 500 Reams
  • Printing Ink, Chemicals, etc
  • Packaging consumable etc.

The manufacturing process of Paper Bags

In case if you miss this: Neem Oil Project Report.

The manufacturing process of Paper Bags
Paper Bag (pic credit: pixabay)

The paper bag size can be obtained by fixing the required size plate to the holder fitted in the machine. In the same way, the length of the tube can be changed by using the size gear wheel.

The cut tube is carried forward by the rollers to the delivery cylinder which is at the bottom and folds the bag. The bottom end of the bag is pasted and the next step is folding. After folding, it is packed in a vertical stack.

Project economics of Paper Bag Manufacturing Business in India

Like any business, paper bags making business even needs two types of capital investment. The primary Fixed capital investment comprises building, land, and machinery expenses. Either you can arrange all the investment with your savings or you can avail some sort of bank loan.

The working capital investment is towards manpower salaries, raw material procurement, rent, and day-to-day other miscellaneous recurring expenses. It is also possible to apply for the working capital loan as an overdraft or cash credit provision from your nearby banks or any financial organization.

Fixed Cost:

Plant & Machinery = Rs 1,87,200

Miscellaneous fixed assets = Rs 82,500

Preliminary & Preoperative Expenses = Rs 4,950

Total Fixed Cost = Rs 2,74,650

Working Capital Cost:

Salary & Wages: Rs. 27,500

Administrative expenses: Rs. 13,666

Selling expenses: Rs. 3,300

Raw Materials: Rs. 2,20,000

Utilities: Rs. 3,880

Total Working Capital Cost: Rs. 2,68,316

Total Cost of the Project: Rs. 5,42,966

Sale price of paper bags: Rs. 8,75,000 per year.

Profitability in Paper Bags Manufacturing Business:  Rs. 8,75,000 – Rs. 5,42,966 = Rs. 3,32,034.

Marketing strategies to promote Paper Bag product

You may also check this: Clove Oil Manufacturing Project Report.

Paper Bag
Paper Bag (pic source: pixabay)

Paper bag making is a B2B business. Thus, proper marketing and advertising are crucial. Because the other businesses will be your clients, you will be careful while providing quality products. You have to maintain an online presence. Also, list the business on various business classified sites. In few months you may plan for the paid listing as well.

Regularly meet your consumers. Offer them creative packaging ideas. This will not only deal with packing but will contribute to their brand awareness. In turn, it endorses customer retention.

In the long run, if you keep a marketing team with some prior marketing experience in this area. It is always recommended to get good quality raw materials for your paper bag-making procedure.



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