Paper Cup Manufacturing Project Report - Business Plan

Paper Cup Manufacturing Project Report, Business Plan

Introduction:

Hello friends, today we are here with a new topic of paper cup manufacturing project report and business plan. If you are serious to start a paper cup business and looking for an appropriate paper cup-making business project report? Then you are at the correct place to see the project guide with machinery information, project expenses estimate, and profit margin.

Beginning a paper cup manufacturing business is simple and money-making too. You can start the business either on a large or small scale. The project capital or investment is dependent on the unit size and the production quantity.

The paper cup is a perishable product and is having numerous benefits. First of all, it can hold both hot & cold liquid for a long duration.

Paper cups are appropriate for individual servings at all kinds of parties, functions, weddings, picnics, tea chat, & food corners, etc.

They are non-toxic, the shapes and surface designs on these paper cups are good-looking and present an appealing look. Also, you can improve the branding by printing the company name and logo on cups and plan it as a promotional strategy.

Thus, paper cups are gaining huge popularity across the country. As the domestic population is growing day by day you will see the constant demand in future.

A step-by-step guide to starting a Paper Cup Manufacturing Project Report

Market potential of Paper Cup Manufacturing Project

The paper cup business is a wide industry. Commonly, the prospects of paper cups are based on the value of customers who make use of it. The product is utilized in villages as well as in cities. The paper cup is available in various sizes and widths. It is obtained from 20 ml to 200 ml in size.

The thickness of the cups is based on the volume of the materials and the nature of the liquid. So, you need have to verify the need for the particular type of cup in the starting. Also, try to know the overall monthly requirement in your locality. It will aid you in assessing the demand and help to supply the paper cups promptly.

Project report/ Business plan for Paper Cup Manufacturing

After determining the product, it is essential to have a project report in hand even though you do not need any finance. As the project report aids in properly arranging the unit. And it is perfect to take professional guidance in preparing the project report.

Generally, the project report has two main sections. One is the technical section and another is financial planning. The two sections are interrelated and dependent on each other.

The total investment of the project may go high or reduce based on the unit size and the production quantity

Project capital investment required to start Paper Cup Manufacturing Project

When you have the estimate of the entire project capital, the next step is to look out for the top investor or the funding. If you have your savings, then no problem at all. Otherwise, you can seek to bank and opt for a project loan. Check, if there any Government scheme for paper cup making project top source your investment. Alternatively, you can plan to get only the machinery finance or take a loan corresponding to working capital only.

Area or location required to start Paper Cup Manufacturing Business

To set-up of a paper cup-making business about 500 sq. ft. of covered area with adequate power and water connection is necessary. It is sensible to set up the unit near an industrial area. When you plan in a residential area it’s very important to seek a ‘No Objection’ from your residents in that region.

The area needed for the unit is dependent on the unit capacity and the machine operation mode. So, it’s better to consult with the machinery suppliers before confirming the location.

Licenses, permissions, and registrations required to start Paper Cup Manufacturing Business in India

The paper cup production business needs business registration. Of course, you can begin as a small-scale unit and register as a proprietorship firm. For a large-scale operation, it must be LLP or Pvt Ltd company registration which again relies upon the investment pattern of the investors.

After the completion of registration, apply for the company PAN Card (not related to the proprietorship firm). Later go for the Trade License. Get the GSTIN, essential nowadays for tax filing. If you want to manufacture the paper cups with your company brand name, then it’s essential to get Trademark for the name. BIS registration is necessary for the ISI mark on the products.

Machinery required to start Paper Cup Manufacturing Business

There are two ways to set up the paper cup-making unit. One is by using a semi-automatic machine and another is by fully automatic. The fully automatic unit yields a large number of cups per hour than its counterpart or the semi-automatic one. However, if you are in the beginning stage, then a semi-automatic unit is best for you. You need a paper cup forming machine, dies, molds, and other necessary equipment, and some various tools. Also, you need a packaging machine for bulk packaging.

The cost of an automatic paper cup manufacturing machine will be around Rs. 5 lakhs – 7 lakhs based on the output and some features.

Raw Materials required to start Paper Cup Making Business

You require the basic raw materials or components for the production of paper cups. The list mentioned below:

Printed PE Paper
Packing Material and
Bottom Reel

Procedure to start Paper Cup Manufacturing Process

The paper cup-making method comprises three different stages. In the first stage, prepare the sidewall of the cups and develop a shape. Then, get the cup bottom and join it with the previous item. The next step includes a 45° angle separating, curling bottom, preheating, curling rim, and so on mechanisms, which are the significant parts in completing the paper cup.

You must preserve the quality control procedures in this business. You have to use food-grade paper which is sterile. Also, you have to abide by the BIS regulations if you use the ISI mark on your product. In most of the scenarios, paper cups are produced in correlation with the customer’s choice and the nature of usage.

How to Sell your product online

If you wish to gain more money in any business and achieve success, going online is inevitable in the current society. There are different ways of making your product presented to customers through the internet. You can deal with your products on e-commerce like Amazon, Paytm, Flipkart, etc., and sell from their apps.

Apart from that if you have a budget to create an online store then it will not only increase your sales but also improve your business branding.

Distribution and marketing of Paper Cup

For the paper cup business, you must focus on selling to other companies/organizations rather than to the common public. Paper cups choose potential market as IT sectors, University Canteens, Factory Canteens, Hotel and food joints that include Fast Foods, Catering People, Tea Stalls, Paper Product Dealers, and Super Markets. Also, the local tea stalls roadside is the regular purchasers of the paper cups. To gain long-term success in the paper cup-making business, you have to take care of steady monthly sales from the plant.

Investment required to start Paper Cup Making Business/Paper cup manufacturing project report, economics

Here, we have added an estimated analysis for a paper cup making for your ease and immediate reference.

In case if you miss this: How To Start A Biryani Business In India.

**Investment required to start Paper Cup Making Business** (Image credit: pixabay)

Fixed capital

Machinery and Equipment: Rs. 6,50,000

Recurring expenditure (per month)

Raw Material Per Month: Rs. 2,55,100

Salaries and Wages Per Month: Rs. 30,475

Utilities Per Month: Rs. 4,750

Utilities Per Month: Rs. 12,500

Total recurring expenditure per month: Rs.3,02,825/-

Recurring Expenditure for 3 months: Rs. 9,08,475/-

Working capital assessment: Rs. 6,50,000.

Financial aspects for Paper Cup Making Business:

Total Project Cost required to start Paper Cup Making Business

Plant and Machinery: Rs. 16,50,000

Working capital: Rs. 16,50,000

Total: Rs. 13,00,000

Total Project cost: Rs. 13,00,000

Promoter contribution 10%: Rs. 1,30,000

Total: Rs. 11,70,000

Finance required from the Bank: Rs. 11,70,000/-

Cost of production per annum

Total recurring cost: Rs. 36,33,900

Interest on Bank Loan @12.5%: Rs. 1,46,250

Total Depreciation on Machinery & Stabilizer @15%: Rs. 90,000

Total Depreciation on furniture’s and other equipment’s @ 20%: Rs.5,000

Total: Rs. 38,75,150.

Turnover Per Annum

By sale of 1,20,00,000 nos. of Paper Cups @ Rs. 0.39: Rs. 46,80,000/-.

Profit Per Annum

Turnover – Cost of Production = Rs. 46,80,000 – Rs. 38,75,150 = Rs. 8,04,850/-

Percentage of profit on sales = Profit/annum X 100/Turnover = 8,04,850 X 100/46,80,000 = 17.2%.

Rate of Return

Rate of Return = Profit per annum x 100/Total Capital investment = 8,04,850 X 100/13,00,000 = 61.91%.

Break Even Analysis

Fixed expenditure per annum:

Interest on Loan: Rs. 1,46,250

Total Depreciation: Rs. 95,000

40% of salary and wages: Rs. 1,46,280

40% of other expenses & Utilities: Rs. 1,82,800

Total: Rs. 4,70,330

Profit margin in Paper Cup Making Business

Profit per annum: Rs. 8,04,850/-

Break Even Point = Fixed Cost per annum x 100/fixed cost per annum + Profit per annum = 4,70,330 X 100/1275180 = 36.88%.

Paper Cup Manufacturing Project Report – Business Plan

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