Twister Plastic Pvt. Ltd.

Fantastic 4 Group

Twister Plastic Pvt. Limited

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Feasibility report on

Twister Plastic Pvt. Limited

IUB
Submitted to:

Sir Adeel Akhtar

Submitted by:

Muhammad Aamir 14 Muhammad Umer Shehzad 41 Imran Ali Umer Arshad 74

M.COM (MOR) 4 SEM FINANCE
TH

44

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DECLARATION We hereby declare that the work done in the feasibility report entitled Twister Plastic Pvt. Limited has been written out by us under the supervision of Lecturer Sir Adeel Akhtar. We also hereby declare that this report has not been submitted for any degree elsewhere. Fantastic 4 Group

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ACKNOWLEDGMENT

Countless thanks to Almighty ALLAH, the Lord of the whole universe and the greatest force behind success in our life.

We bow our head before ALLAH Almighty, who blessed us with potential and stamina to complete our project report. First of all we would like to pay our special regards and thanks to respected teacher Sir Adeel Akhtar who provide us guidance at each and every step in the completion of this report. We are especially thankful to those personalities who help us for the preparation of this report. Fantastic 4 Group

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Contributing our efforts to the welfare of Islam & human beings.

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Executive Summary
Project This proposed project is undertaken to establish a PVC Pipes manufacturing unit at the site of Small Industrial Area Bahawalpur. There is currently high demand for PVC Pipes in the market. To fulfill the gap of supply and demand in the market we are going to set up a new PVC Pipes manufacturing unit. The plant shall be furnished with latest foreign technology and machinery. Annual capacity of plant will be 1,800 tones at 75% capacity first year and after that plant will work on 80% capacity. Working of plant will be 300 days in a year and tripled shifts per day 8 hours each. Four types of basic products will be manufactured 3, 4, 6, 12 inches diameters products. UPVC Fittings UPVC Fittings ASTM D-2466 (Sch. 40 and 80) UPVC Pipes as per (ASTM) UPVC pipes (ASTM D-1785 Sch. 40, 80 and D-2241 SDR SERIES) UPVC Pipes as per (BS-3505/PS-3051) UPVC Pressure Pipes (Class B, C, D & E) CPVC Pipes For Hot water (ASTM F-441 Sch. 40 and 80) UPVC Fittings UPVC Fittings ASTM D-2466 (Sch. 40 and 80) CPVC Fittings CPVC Fittings Well Casing Pipes Well Casing Pipes (PS 3505) (PS 3051) (Class B, C, D & E)

Location and Site The location of unit is Bahawalpur. Site for the PVC Pipes manufacturing unit is the Small Industrial Area Bahawalpur. All the physical facilities and plant installation will be at that site. Sponsors There are four sponsors of the project. Mr. Muhammad Aamir , Mr. M. Umer, Mr. Imran Ali and Mr. Umer Arshad. They are only the sponsors of the PVC Pipes manufacturing unit. Market and demand capacity Fantastic 4 Page 7

Twister Plastic Pvt. Limited The serving place and market for the project unit is Bahawalpur. It is selected because all the cities are surrounding and it is in the center of these surrounding cities. The distribution will be more convenience. And the capacity of the unit is 1,800 tones production in a year and it will work on 75% capacity level at first year then in the coming years the capacity will be enhanced to 80%. Material and inputs There are two major inputs which are used in the production of PVC Pipes. One is Raisin and other is Engro chemical steplizer. These materials are in 25kg bags and really high cost materials. Project engineering Different types of machineries are used in the production process. CMAT machine imported from USA, Mixer machine, die machine, boiler and compressors are purchased from local market. Man power Man power is very important factor. Man power of Twister Plastics Pvt. Ltd is 12 plant workers, 4 machine operators and helpers and 1 is the plant manager. All the workers are very skilled and experienced. Implementation Schedule The projected was started from 1 June, 2012. Through the difference phases of project development the project will be in the operation process on 1 Jan, 2013 INSHALLAH. Cost of project Total estimated cost of the project is Rs. 62 million in which Rs. 49.4 million is fixed cost estimated and Rs. 12.6 million is the estimated variable cost of the project. Financial Plan The financial plan is very important for the project decisions. It shows the debt and equity ratio of the project. The financial plan of Twister Plastics Pvt. Ltd is very simple and straight forward which is 80: 20 debt and equity ratio.

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Twister Plastic Pvt. Limited Financial assistance Financial assistance is taken from MCB, HBl and NBP at the rate of 21% interest rate. Operating result There are certain selected operating results for the unit. (000) 2013 Sales Revenue Gross profit Operating profit Profit before workers fund Net profit 2014 2015 294,641 74,068 46,953 42,362 32,040 297,734 74,746 47,019 42,894 32,348

251,424 63,826 40,096 35,039 26,275

Financial position of business(000) 2013 Total Assets Total noncurrent assets Total current liabilities Total Term Debt Total Equity Long Current 8 54,26 9 22,17 7 27,94 0 57,32 0 2014 53,16 7 59,07 3 25,02 5 24,83 5 89,36 0 63,877 13,651 21,730 121,708 2015 80,14 93,212

Economic indicators

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Twister Plastic Pvt. Limited There will be employment to the community. The peoples will have benefits due to the establishment of the unit. Living standard of peoples will be increased. well. Terms and conditions There may be some problems for the community. Pollution problem, sewerage problem and other chemical usage and smell problem may arise. There will be some steps taken to control these problems. Certain hurdles were also there during the project completion. In the data gathering there was the big hurdle. There was no proper data or information available for the project. To get relevant data process was time consuming. Much problem to find out the exact fact and figures about the PVC Pipes. Target peoples were not much educated to get information from them was big issue. The project development each phase is very time consuming and required high skills. Infrastructure improvements and other social benefits. The unit will also participate in the national economy as

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Table of Content:
Introduction to Project...............................................................................................13 Market and Demand Analysis of PVC Pipes................................................................17 WHAT IS PVC?........................................................................................................17 Different Properties of PVC.....................................................................................17 Products....................................................................................................................18 UPVC Fittings UPVC Fittings ASTM D-2466 (Sch. 40 and 80) ..................................18 UPVC Pipes as per (BS-3505/PS-3051) UPVC Pressure Pipes (Class B, C, D & E) .....19 CPVC Pipes For Hot water (ASTM F-441 Sch. 40 and 80) ........................................19 UPVC Fittings UPVC Fittings ASTM D-2466 (Sch. 40 and 80) ..................................20 UPVC Pressure Fittings UPVC Pressure Fittings ......................................................20 CPVC Fittings CPVC Fittings ...................................................................................20 Well Casing Pipes Well Casing Pipes (PS 3505) (PS 3051) (Class B, C, D & E) .........21 Poly Vinyl Chloride Pipes........................................................................................21 GLOBAL MARKET OF PVC...........................................................................................22 Market of Pipe Industry in Pakistan.........................................................................22 PVC Growth Potential in Pakistan...........................................................................23 Technical Analysis.....................................................................................................26 Location of the Project...........................................................................................26 Manufacturing Process...........................................................................................26 Raw Material.......................................................................................................... 26 PRODUCTION CAPACITY.........................................................................................27 Financial Analysis......................................................................................................29 ASSUMPTION UNDERLYING EARNING FORECAST....................................................32 Assumptions:-........................................................................................................ 45 Economical Analysis.................................................................................................47 INITIAL IMPACT.......................................................................................................47 EMPLOYMENT OPPORTUNITIES...............................................................................48

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BENEFIT COST ANALYSIS........................................................................................48 Ecological Analysis.................................................................................................... 50 LEAD FREE PVC PIPE...............................................................................................50 Storage & Handling ...............................................................................................51 Safety.................................................................................................................... 52 ............................................................................................................................. 52 Project Limitations................................................................................................. 53 Suggestions........................................................................................................... 54

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Introduction to Project

Project was started from 1 June, 2012. This proposed project is undertaken to establish a PVC Pipes manufacturing unit at the site of Small Industrial Area Bahawalpur. There is currently high demand for PVC Pipes in the market. To fulfill the gap of supply and demand in the market we are going to set up a new PVC Pipes manufacturing unit. The plant shall be furnished with latest foreign technology and machinery. Annual capacity of plant will be 1,800 tones at 75% capacity first year and after that plant will work on 80% capacity. Working of plant will be 300 days in a year and tripled shifts per day 8 hours each. Total cost of project is estimated Rs. 62 million. The proposed project is financed by Debt and Equity in the ratios of 80: 20 respectively. This total Cost of the project comprises of Fixed Assets Rs. 49.4 million and Initial Net Working Capital of Rs. 12.6 million. The project is financed by long term loan up to Rs. 12.4 million and the remaining cost of the project will be financed by the sponsor's share capital of Rs. 49.6 million. There are four sponsors of the proposed project Mr. Muhammad Aamir, Mr. M. Umer, Mr. Imran Ali and Mr. Umer Arshad & loan is taken at 21% of interest rate. The capacity of the unit is 1,800 tones production at 75% in first year and in the coming years it will increase to 1,920 tones as 80% capacity. There is much gap is available in the market to fulfill the gap unit will produce and sell certain level of production and try avail the opportunity and get maximum benefits.

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Gantt chart is used to give the sequence of the activities with the time distribution of the project.

Project sanction 1month

Start from 1 May 2011

.... . ... ....

Civil works 3 months Training 2months Machine of site 15days Installation and erection
1month

Plant commissioning 1month Commercial operation 15days

There are certain Government rules and policies about the PVC pipes. Some should be taken to make society pollution free and make the environment pleasant. Government has restricted to use the danger chemicals. Use the chemicals which are good for the safety of environment. Make proper community safety system.

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Twister Plastic Pvt. Limited The target markets of the PVC pipes unit are all the plastic and iron material retailers and distributors. Retailers of Bahawalpur and all surrounding cities like Multan, Sahiwal, Bahawalnagar, Rahim yar Khan, Chishtian, Lahore. These all cities are come in the target market of the unit. It has a very big market and has more future demand potential. Company will use there own distribution channels and local channels to make easy and convenience availability of the PVC pipes. There are certain promoters of the Twister Plastics. It will have marketing staff, selling staff, advertisement strategies and local media channels for the promotion purpose. In the start companies staff and management they promote the company through brushers, cards and personal marketing. The project is financed by the sponsors and financial institutions. The fund which is received through both sources is allocated to the fixed assets and current assets of the company. Fixed assets are 54,269 is allocated from total assets 107,437 and current assets are 53,168. The corporate set up is the partnership. There is partnership deed between four members Mr. Muhammad Aamir , Mr. M. Umer, Mr. Imran Ali and Mr. Umer Arshad. They invest with equal proportion and also share the loss and profits with equal ratios. All the terms and conditions are negotiated between them. They all equally participate in management. They all are responsible for decisions of the company. They also are the management of Twister Plastics Pvt. Limited.

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Market and Demand Analysis of PVC Pipes

WHAT IS PVC? Polyvinyl chloride, PVC commonly known as vinyl is 2nd most sought after thermoplastic. It is a chlorinated hydrocarbon polymer - its basic building blocks are chlorine, carbon and hydrogen. While most plastics are made mostly of petroleum, only 40 percent of the PVC molecule comes from petroleum; 60 percent of it is chlorine, from salt, NaCl. PVC is used for producing high quality leakage free pipelines for conveying water, sewerage or effluent, insulating material for electric cables in construction industry, covering for floors, Door & Window Profiles, Toys, Food packaging, Furniture, Automobile industry, Electronics, Medical usage and shoe manufacturing industry. Different Properties of PVC Thermoplastic Lightweight, toughness and durability Low thermal conductivity Good insulation properties Variety of Colors Corrosion and abrasion resistance Weather ability Fire retardant properties

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Products
UPVC Fittings UPVC Fittings ASTM D-2466 (Sch. 40 and 80)

TWISTER UPVC Fittings available in sizes from to 12, produced in-house and also arranged through imports are meant for connections in potable water supply, pressure systems, sewerage, drainage, housing, industrial, chemical effluents and others. Colors: White and Grey. UPVC Pipes as per (ASTM) UPVC pipes (ASTM D-1785 Sch. 40, 80 and D-2241 SDR SERIES)

TWISTER UPVC pipes according to ASTM D-1785 (SCH-40 & 80, and D-2241 SDR Series) have excellent chemical resistance across their operating temperature range, with a broad band of operating pressures. Due to their long term strength characteristics, high stiffness and cost effectiveness TWISTER UPVC systems accounts for a large proportion of piping installation, such as for potable water supply / conveyance, pressure systems, sewerage, drainage, housing, industrial

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Twister Plastic Pvt. Limited and chemical effluents. TWISTER UPVC pipes are available in diameters from to 24" in standard length of 6 meters in white colors.

UPVC Pipes as per (BS-3505/PS-3051) UPVC Pressure Pipes (Class B, C, D & E)

TWISTER PVC pressure pipes according to specification PS-3051 (BS-3505) are capable of withstanding under extreme pressure. These pipes are meant for conveyance and distribution of potable water, sewerage, irrigation, agriculture, under ground fire fighting lines, industrial effluents and other applications. Pipes classified in Class B, C, D & E according to their pressure rating and wall thickness are available in diameters from to 24" in standard lengths of 4 and 6 meters. Color: Grey & Blue.

CPVC Pipes For Hot water (ASTM F-441 Sch. 40 and 80)

Twister PVC pipes according to ASTM F-441 (SCH 40 & 80) produced from a specialized blend of polymers with a higher class transition point. The Application of PVC pipes include conveyance of hot water from geyser to end use, chemical, industrial and all kind of hot water distribution for temperatures up to 93 C. The pipes range starts in diameters from to 12" in standard lengths of 6 meters. Color: Grey.

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UPVC Fittings UPVC Fittings ASTM D-2466 (Sch. 40 and 80)

TWISTER UPVC Fittings available in sizes from to 12, produced in-house and also arranged through imports are meant for connections in potable water supply, pressure systems, sewerage, drainage, housing, industrial, chemical effluents and others. Colors: White and Grey. UPVC Pressure Fittings UPVC Pressure Fittings

uPVC Pressure Fittings available in sizes from to 24 (imported), for pressure applications in Industries, chemical plants, R.O. plant, pressure water supply, and pump houses. Color: Grey. CPVC Fittings CPVC Fittings

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TWISTER CPVC Fittings available in sizes from to 8, produced in-house and arranged through imports are mainly meant for potable hot water distribution for temperatures up to 93 C, besides there are several other chemical & industrial applications on elevated temperatures within defined recommendation. Color: Grey. Well Casing Pipes Well Casing Pipes (PS 3505) (PS 3051) (Class B, C, D & E)

TWISTER Well Casing / Steiners / Slotted or Perforated / Screen pipes, are produced from UPVC pressure pipes according to PS-3051 (BS-3505), The applications of these pipes include , wells, boring, canals, rivers, roadside drainage, playgrounds and others, Available in Class B, C, D & E in pipe diameters from 3 to 24" in standard lengths of 4 and 6 meters. Color: Grey / Blue. Poly Vinyl Chloride Pipes PVC is a versatile material for piping and has replaced conventional pipes made from conventional materials such as Galvanized Iron (GI), Cast Iron, Asbestos Cement and Concrete Cement. Its compatibility with most fluids, lower cost of material handling and installation, unique combination of properties and availability of highly reliable jointing system makes it an excellent competitor in the piping world, resulting in a product that is a viable competitor to pipes made from other materials in dimensions up to 20 inches. The PVC pipe manufacturing industry has presence in all major industrial cities of Pakistan (i.e. Karachi, Multan, Burewala, Lahore, Sialkot, Narrowal, Faisalabad, Gujranwala, Gujarat, Jhelum, Rawalpindi & Peshawar) which consists of around 400 manufacturing units and manufactures 72,000 metric tons annually (2011). These producers can be classified as part of organized and unorganized sectors. The units can be classified as follows: Fantastic 4 Page 21

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Large Units: 24-30 units Medium Units: 100-125 units Small Units: 250 units.

GLOBAL MARKET OF PVC

Vinyls low cost, versatility, unique set of properties and performance makes it the material of choice for dozens of industries such as health care, communications, aerospace, automotive, retailing, textiles and construction. In the product form it can be as rigid as a pipe or as pliable as a plastic wrap. Over the past few years the market for PVC is on a steady rise. The major driver for the growth is the increased penetration of PVC in insulation cables and pipes. However, the building and construction industries are the basic marketplaces for pipe and the pipe industry usually finds itself firmly ensconced among those boom and bust industries which ride the coattails of our nation's economic fortunes. Another factor of growth in PVC pipes is innovations in pipe resins, pipe structures and pipe processing technology. In the global market PVC pipes and fittings constitute the largest volume application at 36% of the marketplace. Worldwide demand for these pipes is forecasted to increase more than four percent per year through 2007. In the European pipe market, plastic pipes rank first among other materials and globally plastic pipes are used at about 54% of the total pipes used. Polyvinyl chloride (PVC) takes the lion's share at around 62% of the global market. Polyethylene (PE) has 33.5%, while polypropylene (PP) takes about 4.5%. In Europe, 1.5 million tons of PVC was used in 2002 to make pipes. Similarly in case of USA pipe demand is projected to grow 2.5% annually to 15.5 billion feet in 2007. Market of Pipe Industry in Pakistan There are different types of materials used for piping in Pakistan such as Asbestos Cement (AC), Mild Steel (MS), Galvanized Iron (GI), Poly Vinyl Chloride (PVC), Cast Iron (CI), Reinforced Concrete Cement (RCC) and Ductile Iron (DI). Majority of piping applications used in Pakistan range from 0.5 to 60 die sizes. Fantastic 4 Page 22

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Cluster Development Program PVC Pipes, Lahore Cluster Diagnostic Study 11 Sector wise alternatives to PVC are depicted in the table below: Water HDPE, Concrete, Copper, PEX Sewer Concrete, HDPE Conduit & Ducting HDPE, Steel, Aluminum Drain Waste and Vent (DVM) Cast Iron, Copper, ABS, PEX Agriculture & Drainage HDPE, Concrete PVC Growth Potential in Pakistan At present only the most basic PVC applications are being made in Pakistan and that also of low quality. Reasons being: Lack of exposure in international markets Lack of information about PVC processing and its versatility If Pakistans per capita consumption (presently around 0.5 kg/person) becomes at par with world average PVC per capital consumption of around 4.5 kg/person, and then Pakistan would need 585,000 tons of PVC per annum at present population level. The number of jobs created by setting up the integrated facilities to produce PVC and by setting up PVC processing units will be more than 50,000. The incremental impact of producing and processing PVC on GDP can amount to a staggering figure of $ 1 billion. Import substitution $345 Millions Export (25% of domestic production) $187 Millions Domestic sales $561 Millions Energy saving in processing PVC pipes only $48 Millions

In 2011
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Twister Plastic Pvt. Limited Current Demand =93,671 Thousand kilograms (kg) Determine the Projected Demand Demand is projected for the PVC Pipes. Demand is projected in tones Year Demand 2013 2014 2015 Determine the projected supply Supply side is covered for the PVC Pipes. Almost, 400 units supply the PVC Pipes in the market. Supply is projected in tones. Year Supply 2013 73,800 2014 76,400 2015 81,264 88,097 89,483 91,356

Demand and Supply gap Gap is the difference between demand and supply. Gap = Demand --- Supply Gap is determined in tones Projected Demand Projected Supply 88,097 73,800 89,483 76,400 91,356 81,264

Year 2013 2014 2015

Gap 14,297 13,083 10,092

Gap in % 16.2 14.6 11

Note: As the gap is +ve for the PVC Pipes, Market have potential. On that base decision will be made to establish a new unit to fulfill the gap and the unit or project will successful in the future.

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Technical Analysis
Location of the Project The project is proposed to set up at Small Industrial Area Bahawalpur. The site enjoys the following advantages:Easy availability of raw material Access to the main road, Sources of Power, water, fuel etc. Availability of transport & communication like telephone, telex, Internet etc. Availability of skilled and Un-Skilled manpower Free from other environmental hazards like water logging, floods, salinity etc.

Manufacturing Process Die Meters Setting and Product Shaping

Raw Material

Mixing of Materials

Compression

Finish Good

Raw Material The manufacturing process comprises of the following main steps: a) Material handling and Storage b) Mechanical Pretreatment i) ii) iii) Mixing of materials Compression Die meters and product shaping

c) Mechanical Pressing d) Finish good handling

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Twister Plastic Pvt. Limited A) Raw material handling and storage The material for the pipes is received from suppliers and stored material up to the requirements of the unit. B) MECHANICAL PRETREATMENT Material is mixed with the chemicals and makes a mixer. Then that mixer is inserted in the machines which give the final shapes to the products. Four types of product developed and these are different in their die meters. C) MECHANICAL PRESSING At this stage the mechanical compression is done. Then through the further manufacturing process products are developed in the final shapes. The prices of the material are high. Material is used according to the requirements. D) Finish good handling Finish goods are handled. Final goods are stored and sell at the market prices. MATERIAL AVAILABILITY The material is easily available. To see the conditions of Pakistan the availability of material may be a problem. Although the material for pipe manufacturing is very high cost but the availability in the market is easy. Chemical received from Engro chemicals and raisin received from other suppliers. PRODUCTION CAPACITY The Plant is capable of 140 bags of raw material usage per day. It is based on 300 working days per annum and tripled shift per day of eight hours. To fulfill the capacity level foreign technology and machinery will be adopted. Plant will be capable to produce 2400 tons of output if work at 100% capacity. In the start plant will work on 75% capacity and production capacity will be 1800 tones.

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Financial Analysis
In the financial analysis certain type of statements developed for the proposed project. There is detail annexure is given.
Anxr I n e ue

T is r P s sP t. L ite (P os d S E B h w lp r w te la tic v im d rop e ) M 's a a a u E tim te C t of L n s a d os ad

S. n . r o 1 2 3 4 D s r tio e c ip n L nd a S developm expenses ite ent R istra eg tion a leg expenses nd al S m D ta p uty T ta c s o la d o l ot f n A e inm r s ra a la 10 4 10 4 10 4 10 4 R . In(0 0 s 0) u itc s T ta c s n ot o l ot 8 ,0 0 0 0 1 ,2 0 1 0 1 0 ,0 0 10 4 3 2 ,1 5 47 3 6 5 ,2 0 85 7 1 ,6 2 2 5

Sr. no. 1 2 3 4 5 6 7 8

Annexu re II Twister Plastics Pvt. Limited (Proposed) SME's Bahawalpur Estimated Cost of Civil works Rs. In (000) Type of unit of covered rate per Total Description building construction area unit cost Machinery rooms Rcc Square feet 13,613 550 7,487 Office rooms Rb Square feet 2,722 650 1,769 Store room Rb Square feet 12,251 550 6,738 Ware house Rb Square feet 8,167 500 4,084 Bath rooms Rb Square feet 816 500 408 Boundary walls Rb Square feet 3,750 80 300 Guard room Rb Square feet 544 500 272 Contingencies 1,000 Total cost of civil 22,058

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works

A n x r III n e ue

T is r P s sP t. L ite ( ro o e )S E B h w lp r w te la tic v im d P p s d M 's a a a u E tim te C s o M c in ry s a d ot f ah a

S.n . r o 1 2 3 4 5 6 7 8 9 D sr t n e c ip io C AT M M er ix D ie B oiler a dc p or n om res M otor p m u p G era en tor In ta tionof m c in ry s lla ah a T n p tionc t ra s ota os In u n ec t s ra c os T t l c s o m c in r o a o t f a h ay Qy t 1 1 1 1 2 1 u itc s n ot 1 0 0 0 ,0 ,0 ,0 0 1 ,0 ,0 0 5 0 0 50 0 0 ,0 0 1 ,0 ,0 0 2 0 0 2 ,0 0 5 0 1 ,0 ,0 0 2 0 0 R .In( 0 ) s 00 T t lc s oa o t 1 ,0 0 0 0 1 0 ,5 0 50 0 1 0 ,2 0 5 0 1 0 ,2 0 20 5 1 2 ,3 0 60 6 1 ,6 0 68

Anxr I n e ue v

T ise P sic P t L it d( r p s d S E B h w lp r w t r lat s v . im e Po o e ) M 's a a a u Et ae C s o Po c simt d o t f r je t

S.n . r o 1 2 3 4 5 6 7 Ad d D sr t n e cipio Ln ad B ild g u in M c in r a h ay V h le e ic s F r itu a dfix r s u n re n tu e O ee u m n ffic q ip e t P o e tin e p n e re p ra g x e s s Et ae t t lf e c s simt d oa ix d o t In l n tw r in c p l itia e o k g a ita T t le t ae c s o po c oa simt d o t f r je t R.I ( 0) s n 00 T t lc s oa o t 52 ,8 7 2 ,0 8 25 1 ,6 0 68 20 ,6 0 80 0 30 0 10 ,2 0 4, 6 945 1 ,6 5 22 6, 9 200

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A n x rev neu

T ise P sic P t L it d( r p s d S E B h w lp r w t r lat s v . im e Po o e ) M 's a a a u Et ae N tin ia w r in c p a simt d e it l o k g a it l

D sr t n e cipio C rre t a s ts u n se Cs ah A /R I v noy ne t r R wmte l a a ria F is g o s in h o d P p y e ts re a m n T t lc re tas t oa ur n s es C rre t lia ilitie u n b s L a 7 % f in e to s o n 5 o v n rie R.I ( 0 ) s n 00 A on mu t 90 ,0 0 70 0 50 ,0 0 20 ,7 0 10 ,0 0 1, 0 84 0

57 ,7 5

N tin ia w r in c p a e it l o k g a it l

1, 2 26 5

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ASSUMPTION UNDERLYING EARNING FORECAST PRODUCTION AND SALES 1. 2. 3. The proposed PVC unit is based on modern technology and raw material consumption will 140 bags per day. Operating efficiency of the project is assumed at 75% for the first year and 80% for the second 80% for third and subsequent years. In line with recent experience of other units based on the most modern pipes machinery, 100% of the production would be sold locally in local market of Bahawalpur and other surrounding cities. 4. 5. Year-end Inventory is assumed at 10% of the production of that particular year. Selling Prices are assumed in accordance with the current prevailing rates in the local market. These selling prices are based on average of last five years. Based over these assumptions, following is the year-wise detail of production, Sales and Sales Fantastic 4 Page 32

Twister Plastic Pvt. Limited Revenue of the proposed project:

Annexure vi

Twister Plastics Pvt. Limited (Proposed) SME's Bahawalpur Estimated Income statement
Description Sales revenue Cost of sales Raw material Labor Overheads Depreciation Total cost of manufacturing Inventory adjustment -less Cost of sales Gross profit Operating expenses General and administrative expenses Selling expenses Total operating expenses Operating profit Interest expenses Amortization of pre-production exp. Profit before workers fund Workers fund Net profit 2013 251,424 184,961 6,077 12,200 5,204 208,44 2 20,844 187,598 63,826 6,130 17,600 23,730 40,096 4,657 400 35,039 8,764 26,275 2014 294,641 197,292 6,685 12,740 5,204 221,92 1 1,348 220,573 74,068 6,490 20,625 27,115 46,953 4,191 400 42,362 10,322 32,040 Rs. In (000) 2015 297,734 197,292 7,353 13,258 5,204 223,107 119 222,988 74,746 6,886 20,841 27,727 47,019 3,725 400 42,894 10,546 32,348

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Annexure vi A

Twister Plastics Pvt. Limited (Proposed) SME's Bahawalpur Assumption underlying earnings forecast
Production at 100% capacity PVC Pipes manufacturing 140 bags of raw material / day 3'' PVC Pipes 4'' pipes 6'' pipes 12'' pipes wastage Total No of vessals 4 4 4 4 4 % outp ut 30 20 30 15 5 Quantity in ''tones'' 720 480 720 360 120 2,400 Annexure VI A

Cost of Production
Raw Material Years Capacity utilized Required raw material: Description 140 bags of raw material / day Total quantity consumed Cost of raw material 2013 75% Quantity in ''tones'' 1,800 1,800 2014 80% 2015 80%

1,920 1,920

1,920 1,920

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Description Raw material @ 102,756 per tone Total cost Rs in ''000'' 184,961 184,961 197,2 92 197,2 92 197,292 197,292

Annexure VI A Labor cost Plant labor Plant manager Machine operators Helper Plant labor Pean and sweeper Guard Store keeper Total Fringe benefits on basic salary 20% Total labor cost Year wise wages of labor Description Total cost of labor No. of Employees 1 2 2 12 4 2 1 Salary/Month/W orker 60,000 30,000 20,000 16,000 10,000 10,000 20,000 Annual salary ''000'' 720 720 480 2,304 480 240 120 5,064 1,013 6,077 Rs in ''000'' 2014 7,353

2012 6,077

2013 6,685

Annexure VI A Manufacturing overhead cost Description

Rs in ''000''

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Fixed cost Electricity expense Insurance expense Machinery and Building maintenance Total fixed cost Variable overheads Electricity expense Machinery and Building maintenance Total variable over heads

800 1,500 1,800 4,100 9,000 1,800 10,800

Year ending manufacturing overheads as per different capacities Description

2,013 75%

Fixed cost Variable cost Total overhead cost

4,100 8,100 12,200

2014 80% Rs in ''000'' 4,100 8,640 12,740

2015 80%

4,100 9,158 13,258

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Annexure VI A Year ending 30th December Capacity utilized 2011 75% 2014 80% Quantity in tones 576 54 630 58 572 2015 80%

Production of 3'' PVC Pipes a) No of units manufactured Add: Opening inventory Total units available for sale Less: Closing inventory 10% of production Units sold Production of 4'' PVC Pipes b) No of units manufactured Add: Opening inventory Total units available for sale Less: Closing inventory 10% of production Units sold Production of 6'' PVC Pipes c) No of units manufactured Add: Opening inventory Total units available for sale

540 540 54 486

576 58 634 58 576

360 360 36 324

384 36 420 38 382

384 38 422 38 384

540 540

576 54 630

576 58 634

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Less: Closing inventory 10% of production Units sold Production of 12'' PVC Pipes d) No of units manufactured Add: Opening inventory Total units available for sale Less: Closing inventory 10% of production Units sold Sales Revenue Description a) 3'' pipes b) 4'' Pipes c) 6'' pipes d) 12'' pipes Total sales Unit price 202,50 0 116,00 0 170,00 0 135,00 0 75% 98,415 37,584 82,620 32,805 251,424 80% 114,817 44,312 97,240 38,272 294,641

54 486

58 572

58 576

270 270 27 243

288 27 315 29 286

288 29 317 29 288 Rs in ''000'' 80% 116,4 58 44,54 4 97,92 0 38,81 2 297,7 34 Annexure VI A

Selling expensses Selling expensses are assumed to be 7% of sales revenue Description

2013

Selling expneses

23,270

2014 Rs in ''000'' 27,148

2015

27,535

Annexure VI A Administrative and general expenses Designation Managing director Accountant No of Employees 1 1 Salary / Month 120,000 40,000 Annual salary in '000' 1,440 480

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Clerk Gowdon keeper total Fringe benefits 20% of basic salary Total salary General expenses Description Traveling expenses Printing and stationary Telephone, telex and postage Rent and taxes Entertainment Legal and audit Miscelllaneous Total Assumption: Administration salaries will increase @ 10% every year Year expensis in '000' 300 180 180 1,200 200 170 300 2530 2 2 25,000 20,000 600 480 3,000 600 3,600

Depriciation 15% of building 10% of Machinary 6% vehicles 7% of furniture and fixtures 5% of office equipments total

Rs in ''000''' 3,309 1,668 156 56 15 5,204

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Annexu re VII

Twister Plastics Pvt. Limited (Proposed) SME's Bahawalpur Estimated Cash Flow Statement
Rs. In (000) Opera ting years 2012 2013

years ending Dec. 31 SOURCES OF FUNDS: Operating Profits Depreciation Total Funds from Operation Other Sources:

2014

2015

0 0 0

40,096 5,204 45,300

46,953 5,204 52,157

47,0 19 5,204 52,22 3

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31,0 45 0 31,0 45 62,0 90

Long Term Loan short term Bank Borrowings Paid-Up Capital Total Sources of Funds APPLICATION OF FUNDS:

0 0 0 45,300

0 0 0 52,157

0 0 0 52,22 3

Investment in Fixed Assets Financial Charges during Construction Pre-Production Expenses Repayment of: Long Term Loan Financial Charges On: Long Term Loan short term Bank Borrowings PAYMENT OF: Taxes Dividends Worker's Fund Short Term Investment Increase in Current Assets (Other than Cash) Total Application of Funds Cash Surplus/(Deficit) Cash at the Beginning of the Year Cash at the end of the year

48,2 65 0 1,20 0 0

0 0 0 0

0 0 0 3,105

0 0 0 3,105

0 0 0 0 0 3,00 0 6,00 0 58,4 65 3,62 5 0 3,62 5

4,657 0 0 0 0 10,000 25,624 40,281 5,019 3,625 8,644

4,191 0 0 0 8,764 30,000 2,156 48,216 3,942 8,625 12,567

3,725 0 0 0 10,32 2 32,00 0 218 49,37 0 2,853 12,56 7 15,4 20

Annexure VIII

Twister Plastics Pvt. Limited (Proposed) SME's Bahawalpur Estimated Balance sheet
Rs. In (000) End of Construction Oper ating years

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years ending Dec. 31 ASSETS: CURRENT ASSETS: Cash and Bank Balance Short Term Investment Accounts Receivable Inventories: Raw material Finished Goods Advances, Deposits and Prepayments Total Current Assets FIXED ASSETS: Fixed Assets at Cost Accumulated Depreciation on Fixed Assets Fixed Assets Net Intangibles Total Assets LIABILITIES AND EQUITY: CURRENT LIABILITIES: Short Term loans interest payable Worker's Fund Payable Current Maturity of Log Term Debt Total Current Liabilities LONG TERM DEBTS: total Long Term Debt EQUITY: Paid-Up-capital Retained Earnings Total Equity Total Liabilities and Equity 2012 2013 2014 2015

3,625 3,000 0

8,644 10,000 700

12,56 7 30,00 0 1,700 12,68 8 22,19 2 1,000 80,14 7 48,26 5 10,40 8 58,67 3 400 139,2 20

15,42 0 32,00 0 9,794 12,68 8 22,31 0 1,000 93,21 2 48,26 5 15,61 2 63,87 7 0 157,0 89

5,000 0 1,000 12,625

11,980 20,844 1,000 53,168

48,265 0 48,265 1,200 62,090

48,265 5,204 53,469 800 107,437

0 0

10,308 0 8,764 3,105 22,177

0 0

11,59 8 0 10,32 2 3,105 25,02 5 24,83 5 31,045 58,31 5 89,36 0 139,2 20

0 0 10,54 6 3,105 13,65 1 21,73 0 31,045 90,66 3 121,7 08 157,0 89

31,045 31,045 0 31,045 62,090

27,940 31,045 26,275 57,320 107,437

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Annexure IX Break even analysis Variable cost 184,961 6,077 8,100 0 0 17,600 0 0
216,738

at 75% capacity

fixed cost 0 0 4,100 5,204 6,130 0 4,657 400

20,491

Raw material Labor Overheads Depreciation expenses Administrative & General Expenses Selling Expenses Interest / Mark-Up Expenses Amortization of Pre-Production Expenses Total:

total cost 184,96 1 6,077 12,200 5,204 6,130 17,600 4,657 400
237,229

B reak even point B reak even point

2 ,4 1 0 9 = ----------------------------------------- 5 *7 % 2 1 2 -5 ,4 4 26 3 1 ,7 8
44.30%

Annexure IX

Twister Plastics Pvt. Limited (Proposed) SME's Bahawalpur Break Even Analysis
cash break even at 85% capacity

Variable cost 197,292 7,353 9,158 0 0 0 0 0

213,803

fixed cost 0 0 4,100 6,886 20,841 3,725 10,546 3,105

49,203

Raw material Labor Overheads Administrative & General Expenses Selling Expenses Interest / Mark-Up Expenses workers fund Debt payment Total:

total cost 197,29 2 7,353 13,258 6,886 20,841 3,725 10,546 3,105
263,006

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B kevenpoint rea B kevenpoint rea

4 ,2 3 9 0 = ----------------------------------------- 0 *8 % 213,803 2 7 3 -9 ,7 4 4 .9 % 6 0

A n n e x u re - X I

Twister Plastics Pvt. Limited (Proposed) SME's Bahawalpur

C a lc u la tio n o f In te rn a l F in a n c i a l R a te o f R e tu rn Rs in ''0 0 0 ''

C a p it a lO p e ra t in g W o rk e r's N e t C a s h e t C a s h I n flo w N Y e a rs O u t la y P ro fit D e p re cia t io n F u n d T a x e s R e t u rn ( O u t flo w ) 0 5 5 ,4 6 5 -5 5 ,4 6 5 1 3 0 ,2 3 1 4 0 ,0 9 6 5 ,2 0 4 8 ,7 6 4 0 3 6 ,5 3 6 6 ,3 0 5 2 1 8 ,2 1 6 4 6 ,9 5 3 5 ,2 0 4 1 0 ,3 2 2 0 4 1 ,8 3 5 2 3 ,6 1 9 3 1 7 ,3 7 0 4 7 ,0 1 9 5 ,2 0 4 1 0 ,5 4 6 0 4 1 ,6 7 7 2 4 ,3 0 7 4 0 4 7 ,0 1 9 5 ,2 0 4 1 0 ,5 4 6 0 4 1 ,6 7 7 4 1 ,6 7 7 5 4 7 ,0 1 9 5 ,2 0 4 1 0 ,5 4 6 0 4 1 ,6 7 7 4 1 ,6 7 7 6 1 ,5 0 0 4 7 ,0 1 9 5 ,2 0 4 1 0 ,5 4 6 0 4 1 ,6 7 7 4 0 ,1 7 7 7 4 7 ,0 1 9 5 ,2 0 4 1 0 ,5 4 6 1 6 ,4 1 3 2 5 ,2 6 4 2 5 ,2 6 4 8 4 7 ,0 1 9 5 ,2 0 4 1 0 ,5 4 6 1 6 ,4 1 3 2 5 ,2 6 4 2 5 ,2 6 4 9 4 7 ,0 1 9 5 ,2 0 4 1 0 ,5 4 6 1 6 ,4 1 3 2 5 ,2 6 4 2 5 ,2 6 4 10 4 7 ,0 1 9 5 ,2 0 4 1 0 ,5 4 6 1 6 ,4 1 3 2 5 ,2 6 4 2 5 ,2 6 4 11 1 ,5 0 0 6 0 ,3 4 5 2 ,7 5 5 4 ,8 2 8 2 4 ,9 8 3 3 3 ,2 8 9 3 1 ,7 8 9 12 6 0 ,3 4 5 2 ,7 5 5 4 ,8 2 8 2 4 ,9 8 3 3 3 ,2 8 9 3 3 ,2 8 9 13 6 0 ,3 4 5 2 ,7 5 5 4 ,8 2 8 2 4 ,9 8 3 3 3 ,2 8 9 3 3 ,2 8 9 14 6 0 ,3 4 5 2 ,7 5 5 4 ,8 2 8 2 4 ,9 8 3 3 3 ,2 8 9 9 9 ,4 3 2 15 - 4 1 ,3 1 0 6 0 ,3 4 5 2 ,7 5 5 9 ,6 5 6 4 9 ,9 6 5 3 ,4 7 9 4 4 ,7 8 9 IFRR 42%

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Assumptions:Calculation of IFRR for the project has been carried out under the following assumptions:1. The economic life of the project would be 15 years 2. The entire capital outlay would be incurred one year prior to the Commencement of commercial operations; 3. Motor Vehicles and operating equipment would be replaced after Every five years; 4. Salvage value at the end of the life of the project represents Recovery of working capital, book value of buildings, office Furniture and fixtures and original value of land.

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Economical Analysis
Economic evaluation is considered prominent yardstick to measure the viability of a project. This analysis is directed towards determining whether the project is likely to contribute significantly to the development of the economy as a whole and the contribution of the project would be great enough to justify the use of available resources. This aspect is reviewed under the following:INITIAL IMPACT In order to pursue a theory of balanced growth of the economy the current government is putting an emphasis on industrialization of our inherently agrarian economy. Industrialization of substantial dynamic benefits is important for changing the traditional structure of our less developed economy, while providing employment for a rapidly increasing labor force, and saving scarce foreign exchange by import substitution and creating export potentials. A capital expenditure creates incomes for people engaged in the fabrication of capital goods, who in turns spend their incomes on consumer goods. An initial original capital investment creates a wave of income and spending which has multiplied effect on the national income, increasing it by several times, the original investment. The initial original capital investment of Rs. 62 million in local currency would have a healthy impact on the GNP of the country, the extent of which depends on the degree of multiplied effect. It may have major contribution to the society benefits. There will be employment, infrastructure improvements and that will be a factor to improve the living standards of the peoples.

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Twister Plastic Pvt. Limited EMPLOYMENT OPPORTUNITIES The project would create employment opportunities for the following staff: Detail Skilled Labor Factory Administrative Staff Marketing Staff BENEFIT COST ANALYSIS The benefit/Cost ratio of the project is worked out in times which are considered satisfactory. The NPV of the expected benefit and costs has been taken into account for the calculation of this ratio. Total Nos. 15 14 02

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Ecological Analysis
It is the analysis how the project is beneficial for the environment and what will be the problems due to the implementation of the plant. The project may be more beneficial for the society and environment because there will be improvements in the environment with respect to infrastructure, employment to society, improvements in the living standards, development structures, better education system, health system and other facilities. Speciality Services As per customer requirement a complete inventory of UPVC and CPVC valves and fittings in all configurations is readily available, making Twister a one-source supplier for virtually any piping systems application. LEAD FREE PVC PIPE Too much lead in the body can seriously injure the brain, nervous system, the kidneys and red blood cells. The symptoms of higher levels of lead in the body is manifested by and can cause mental retardation, fits (convulsions), falling out (unconsciousness, coma), and even death. In the years past, that kind of effect was called lead poisoning. Exposures high enough to cause coma and death are very uncommon today, but they haven't disappeared totally. As we keep using more lead there will be more exposure to lead in the environment. Lead accumulates in our bodies, and especially in children's bodies. Exposure to small amounts of lead over time can mean a long-term accumulation of lead in a child, raising the child's risk of bad health effects. Pregnant women who have lead stored in their bones may release some of that bone lead into their K blood, where it can reach the womb and fetus during pregnancy. That kind of transfer potential makes us think about lead exposures in today's children and what that may mean for the children. Twister UPVC Pipe has very impressive performance record in commercial housing, multi-storey buildings & public health projects for hot & cold water including high-pressure requirements. By launching Twister Jadeed (the Lead Free Pipe) we insure that public health is our first priority and our social responsibility. Fantastic 4 Page 50

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There may be some problems to the society due to the implementation of unit. Pollution problems, chemicals, sewerages, water and smell problems. These problems may arise but before that there will proper arrangements to remain safe from these problems. There will be proper arrangements and implementations of society safety systems. All the government rules will be followed and there will be no objection or issue to any person in the society. Storage & Handling Twister piping products are inspected, handled and loaded with great care at the factory using methods that have been developed specifically for plastic pipe to ensure that damage is minimized and overall quality is maintained during shipping. It is the carriers responsibility to deliver the shipment in good condition. It is the receivers responsibility to ensure that there has been no loss or damage, and that the products are unloaded and stored properly after receipt. Reasonable care and common sense should be used when handling and storing Twister thermoplastic piping products. Thermoplastic pipe and fittings may be stored indoors or outside in yards. If stored outdoors, pipe and fittings should be protected from direct exposure to sunlight, and pipe should be properly supported in storage to prevent sagging or bending. Pipe should be stored at the job site on level ground in the unit packages (skids) provided by the factory. Caution must be exercised to avoid compression, damage or deformation. Thermoplastic pipe must not be stored in tightly enclosed areas subject to elevated temperatures or close to heat producing sources such as heaters, boilers, steam lines, engine exhaust etc. Exposure to excessive temperatures will result in distortion and deformation of the product. When stored outdoors Twister thermoplastic pipe must be covered with a non-transparent material. This covering must provide adequate air circulation above and around the pipe as required to prevent excessive heat absorption that can result in discoloration and deformation of the product. PVC piping products in storage should not be exposed to temperatures above 150F. CPVC piping products in storage should not be exposed to temperatures above 210F. Although Twister products are tough and corrosion resistant, they should not be dropped, have objects dropped on them, nor subjected to external loads. Thermoplastics can be damaged by abrasion and gouging. Pipe must not be dragged across the ground or over obstacles. Impacts such Fantastic 4 Page 51

Twister Plastic Pvt. Limited as dropping from sizable heights and/or rough handling should be avoided, particularly in cold weather. The product shall be inspected for any scratches, splits or gouges that may have occurred from improper handling or storage. If found, these sections must be cut out and discarded. Safety Thermoplastic piping is a general term applied to a variety of different plastics. A user of plastic piping should select the kind of plastic best suited for his use. Special care must be used to apply proper engineering, design and installation procedures. Twister recommends against the use of its thermoplastic piping systems for transport or storage of compressed air or gases. Trapped air must be removed from liquid piping systems so that no air remains locked in the system when pressure is applied to the liquid. Excessive surge pressure must be avoided. Surge pressure can develop if liquid movement through the pipe is near maximum velocities and valves are closed abruptly. Maximum velocity is generally considered to be five feet per second. Failures can occur at the joints connecting the pipe and the fittings. For example, threaded joints have a diminished wall thickness because of the cut of the thread into the wall. Also, improperly cemented joints will leave the strength of the joint impaired. Temperature extremes, both hot and cold or changes in temperature can result in failures of plastic pipe in the following cases: (1) Breakage or other damage on the job site in cold weather can be caused by impact with tools, vehicles or rocks. (2) Heat of solution of chemicals or heat from other sources can cause failure because the piping systems will be distorted. (3) Wide variations in temperature when the pipe is restrained as in concrete or is otherwise anchored can lead to cracking and breakage. (4) Freezing of pipe contents when the line is full can lead to breakage. (5) When heat is introduced by a pump especially when on recirculation, the pipe or joints can fail. (6) Expansion and contraction can cause leakage or breaks at joints. there are the safety requirements and work done by the company.

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Project Limitations
Time availability Less educated target peoples Not proper coordination by the respondents Lack of secondary information No proper information about the pvc pipes Short of time There is no reliable information availability Lack of information gathering sources High complexity of the project

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Suggestions
Project scope is good A unique type of project There should be proper information sources For the project time duration should be high There should be cooperation by the respondents Well educated peoples should be there in the market For the project high level of technical and intellectual skills needed Try to get more reliable information Information searching level should be high Try to use your skills and abilities to accomplish the project There should be proper coordination and cooperation between the group members and all relevant peoples.

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