STARTING PLASTICS INJECTION MOULDING MANUFACTURING

PLANTSTARTING PLASTICS INJECTION MOULDING MANUFACTURING

PLANT

If you have reached this page then somehow you are associated with Injection Moulding of Plastics, if not
then you can still find some useful information about starting a business.
Starting any business need planning. Planning includes the following points to be studied and discussed
with experienced professionals, friends before actually starting a company.

Purpose of Starting

Experience in Injection Moulding

Financial background

Technical knowledge about Plastics Processing

Location of Plant very important

End Customers and Location

Products to be manufactured / Job Work

Type of Products to be made Commercial / Industrial / Automotive / Aerospace

Legal Status of the Company Proprietor / Partnership / LLP / Pvt. Ltd. / Ltd.

Number of Partners / Directors

It all starts with your knowledge and experience in the Plastics Processing Industry, especially Injection
Moulding. I restrict my discussion to starting a small Proprietorship / Partnership company doing Job work
or moulding commercial plastics components.
Now a days many people who are not associated with plastics are also starting Injection moulding plant,
by way of necessity / opportunity available.
Most people think about their budget first and decide about the size of the plant accordingly. For a new
comer starting Injection Moulding plant with little experience in the field, seems to be easier with smaller
machines initially. But you have to look at the over all project cost before deciding what capacity machine
to be purchased.
Let us assume that one has decided to start with 100Tons Injection Moulding Machine to manufacture
Commercial items like 20 liter Water Jar Cap or house hold items.

PROJECT REQUIREMENT AND COST

Sl.No.

Plant Requirements

Details

Plant Size in Square Feet

400 600 Sq.ft

Amount of Rent per Month @ 20 per sq.ft

8000 12000 minimum

If rental Premises Cost of Advance

10 Months of rent is norm

Cost of Machine assuming Used Machine

6.0 to 8.0 Lakhs depends on age

and condition of the machine,.

A Frame with 2tons Chain Pulley Block

50000/-

Power Required for Machine

Approx 35hp

Cooling Water Pump Power

1hp

Cooling Tower and Piping

60000/-

Mould clamps and Tools

30000/-

10

Hydraulic Oil for Machine about 200liters

25000/-

11

Machine loading and unloading erection

25000/-

12

Machine Transportation if not in the same city

5000 15000/-

13

Electrical fittings, wiring in the Building

14

Accessories like Scrap Grinder, Oven

15

If own products then cost of Mould

16

Working Capital considering 6 months rent, wages, and

30000/If required
3.0 lakhs

other expenses
17

Number of employees assuming accounts work to be taken

6 for 24 hours operation

care by owner./ consultant

18

Registration with Sales Tax

19

Stationery Printing

10000/7000/-

20

Office Furniture

25000/Rs. 13,97,000/-

TOTAL INVESTMENT

Monthly Expenses
Description

Details

Electricity Bill

15,000/-

Wages and staff welfare

40,000/-

Miscellaneous Expenses

5000/-

Telephone / Mobile Expenses

1000/-

Transportation Expenses
Interest on Investment @ 18% per annum
Insurance for Equipment

To be determined
20475/To be determined

Total Monthly Expenses

81475/-

**** assuming accounts related work is carried by owner. Otherwise you may have to pay another Rs
1000/- Per month for filing sales tax returns.

Annual Expenses

Audit fees.

Filing of Income tax returns

Annual Sales tax assessment

Bonus for Employees

Festival / Pooja Expenses if any

Insurance for Equipment and plant

Statuary Requirements

License to be taken from local Panchayat / Muncipality / Corporation to run the Business.

Profession tax to be deducted from employees and paid to the corporation

Monthly Sales Taxes to paid before 20th of Every month after filing returns online.

If Registered with Central Excise then Duties to be paid before 5 th of every month

if Registered with Service Tax then same to be paid before 5th of every month.

TDS to be deducted and paid for payments made to sub-contractors, service providers.

Registration with ESI and PF to be made if no of employees are more than 15.

Filing Income Tax returns every year.

NOC from Pollution Control Board.

Working Capital Requirement

About six month's expenses to be the basis for working capital, so it is about 5,00,000/- in this case. This
amount needs to be kept aside and should not be used for buying equipments and machines
If the Machine is in good condition then it will not give any trouble otherwise spending for the machine
repairs will also to be accounted.

Billing and Revenues

Assuming 100 tons Injection moulding machine is being used for producing commercial plastic
components, then costing is done based on shift rate or based on weight of Materials converted in Kgs. Per
shift 1000 to 1500 or per Kg Rs. 10/- is now norm in the market.

Revenue Calculation
Shift Rate

1500/-

Per Day

4500/-

Per Month assuming 25 days of production

112500/-

So the revenues are just sufficient to pay the monthly expenses. If Owner is able to reduce the Employee
expenses, then that expense can be saved to survive. For this, Machine should run without any trouble for
25 days and there should be orders for the same. If any one fails then it will become loss.
To avoid this any one starting company should start with little higher capacity machine like 200 tons and
above, so that monthly revenues will be more and wages would be same so that income increases. Wages
and Electricity bills are most expenses should be paid monthly without fail.
For this reason we strongly recommend not to start with lower capacity machine. Adding second machine
with in one year will reduce the administration expenses like wages and increase the growth prospects.

Assumptions made in Project Report

Materials processed are PP, HDPE, LDPE. Etc which does not need preheating.

Location : Tamilnadu. Other places local taxes may wary like octori

Labour availability and cost low / medium.

Un-official expenses not taken into account

Some times accommodation to be provided for employees is not accounted.
If ABS, Nylon, Polycarbonate, etc then Cost of Pre-heating the material and its equipment cost also to be
considered in the project cost.
If doing job work for any Automotive Supplier then maintaining Quality standards like ISO9000, registering
with Central Excise is also to be done.

Service Tax Implications

If billing done to one single customer and if it exceeds 4.0 lakhs per annum then Registration with service
tax is mandatory and service tax to be charged, if customer is not an assessee of Central Excise. If not
Job work, then Sales Tax rate based on the components produced to be levied and the same to be paid
to the CTO (commercial Tax Officer ) every month by filing returns.

Other issues to be taken care

Safety during machine operation. Several instances are there where employees have lost
fingers / hands / life due to poor maintenance of shop floor and machines. Safety of the Mould is also
uptmost important. Many times operators use metal rods to remove the stuck components from the mould
which will damage the mould. Also clamping of the mould to be done propperly with right torque. Bolt
should enter the platen atleast 30mm.
Recently one of our customer who started a new company lost half of his hand even before company is
up and running. Safety issues needs to be seriously taken care of from the beginning of the operations.
Internal wiring to done with proper earthing to the Machines.
Several companies gutted completely due to short circuit, losses running into cores of rupees. Any
unexpected loss to a new company that too in the first year is too much to bear and should take extreme
care in maintaining the shop floor and employee safety.
It is always suggested to make detailed study before stepping into starting a new company. Decisions
should not be taken on assumptions / hypothetical thinking. Discussing with experienced professionals in
the filed is mandatory.

Support from

At creative we provide professional support to the customers to buy suitable machines and offer after
sales support through out the life of the machine. Some times we even say not to venture into based on
the market conditions prevailing. Some times we suggest to go for bigger capacity machines instead of
smaller machines.
So far we helped lot of new companies who have grown well and doing good business. We helped
companies to reduce the Electricity bills. We helped companies, who want to close by selling their
machines. Simply we are one point source for all your need for setting up , running an Injection Moulding
Plant.