LAIQA FABRICS LIMITED

BUSINESS PLAN FOR MANUFACTURING NON WOVEN

BAGS, PAPER BAGS AND STRAWS
 TABLE OF CONTENTS

EXCECUTIVE SUMMARY

1. COMPANY OVERVIEW..…………………………………………1
1.1 MISSION STATEMENT………………………………………1
1.2 VISION STATEMENT…………………………………………1
1.3 BUSINESS DESCRIPTION…………………………………..2

2. RISKS……………………………………………………………………………..2
2.1 COMPETITION………………………………………………….2
2.2 TECHNOLOGY………………………………………………….3

3. PRODUCT DESCRIPTION……………………………………………………3
4. MARKETING PLAN…………………………………………………………….5
5. OPERATIONS……………………………………………………………………6
5.1 ORDERING PROCESS (VALUE CHAIN)…………………..6
5.2 NON WOVEN BAGS PRODUCTION CAPACITY…………6
5.3 PAPER BAGS PRODUCTION CAPACITY…………………6

6. MACHINERY…………………………………………………………………….7
7. MANAGEMENT SUMMARY………………………………………………….8
7.1 FINANCE…………………………………………………………10
7.2 CASH FLOW ANALYSIS………………………………………10
 EXCECUTIVE SUMMARY
LAICA FABRICS LIMITED has come up with a perfect substitute for the
plastic carriage bags keeping in mind the environmental hazards that come
along with plastics. We will initially deal with carriage bags (paper bags & non-
woven bags) and drinking straws.

This business idea is as a result of taking into consideration the harmful

effects of plastic to the environment. Thanks to the plastic bag ban in the
country, our business has a better opportunity to bridge the gap created.

1.COMPANY OVERVIEW
This project document details the business plan laid by Laiqa Fabrics
Limited to start and run a carriage bags (paper bags and non woven bags)
manufacturing plant in Tanzania. The firm’s principal place of business will be
located in Chang’ombe area, Plot No. 1028 – Dar es Salaam.

LAIQA FABRICS LIMITED is a private owned company registered in

accordance with section 15 of the companies Act (Capt. 212) of the United
Republic of Tanzania and was issued with a Certificate of Incorporation No.
139519175. The Company is registered with the Tanzania Revenue Authority
(TRA) and has been assigned the Taxpayer Identification Number (TIN) 139-
519-175. We are willing to work with the necessary legal bodies to meet all the
legal requirements.

The authorized share capital of Laiqa Fabrics Limited is Tsh. 100,000,000/=

divided into 1,000 shares of Tsh. 10,000/= each.

1.1. MISSION STATEMENT:

To be the best carriage bags manufacturer, processor and importer in the

region with the aim of attaining world class business efficiency to all the
company’s stakeholders.

1.2. VISION STATEMENT:

To revolutionize the textile industry by offering high quality products (non-

woven bags) at an affordable price on a timely basis.

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 1.3 BUSINESS DESCRIPTION

Due to the legislation of plastic bags ban since 1st June this year (2019), a
huge opportunity for a substitute emerged. This substitute has to be:-

I. Strong enough to carry heavy items such as grocery and

others
II. Durable enough to be used multiple times
III. Cheap enough to be afforded by the common ‘Mwananchi’
and also eco-friendly to minimize environmental pollution
which was the main reason for the plastic bags ban.

Currently there is such a huge demand that the supply of carriage bags
doesn’t come anywhere near the market demand in Tanzania.

Some of the activities that the company is set to carry out are:

 Manufacturing of non – woven bags, paper bags,

biodegradable carriage bags
 Manufacturing of textiles
 Carry on the business of recycling papers
 Importation of papers
 Importation of raw materials and machinery for paper bag
manufacturer
 Let or lease the plant whole or any part of the Company’s
property for manufacturing, commercial or other purposes.

2. RISKS

2.1 COMPETITION

We are aware that we have other companies dealing in the same products as
we do but they have failed to satisfy the market demand.

Key competitors are;

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PAPERBAGS TANZANIA LTD. Has more than 50years of experience in the
carriage bags industry operating in East and Central Africa.

(Source: www.paperbagsltd.co.ke)

Others are small scale manufacturers operating in different regions in

Tanzania.

2.2 TECHNOLOGY

This is a risk facing all industries in general as the whole world is experiencing
a technological evolution where machines are being faced out each day by
better more efficient ones. This might make a company face the risk of
underproduction due to lower production capacity than the ordered one or
expose the company to being pbsolete i.e. manufacture products that are no
longer marketable due to being old fashioned. We plan to tackle this by
purchasing state of the art machinery paired with skilled manpower.

3. PRODUCT DESCRIPTION
Laiqa Fabrics Limited is introducing locally made non woven as well as bio
degradable carriage bags which vary in size and in special situations we will be
providing an option of a customized message or label on our products if a
customer asks for that service.

(A) PAPER BAGS

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These will be made by locally recycled papers or sourced from our plant. They
can be customized as per clients request pertaining to size, quality, shape,
colour, design texture, handle and label to be placed.

(B) NON-WOVEN CARRIAGE BAGS

These will come in different fabrics.

Stronger than paper bags and also have a more luxury look.

They are more ecofriendly than paper bags due to their durable nature which
makes them reusable hence dumbed less frequently than paper bags.

(c) DRINKING STRAWS

These may be customized into different colours or patterns

depending customers’ request.

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 4. MARKETING PLAN
We will be manufacturing customized bags based on our clients needs e.g
size, texture and color with the option of printing the clients wording or name if
they ask for that service.

We will be targeting all retail outlets like grocery stores, pharmacies,

supermarkets and branded outlets.

We will use personal selling and mass media as our major marketing strategy
where our sales team will contact our clients and explain the product.

Target Market Plan:

 Location: Tanzania
Reason: Good opportunity due to plastic bags ban and the
current manufacturers have failed to satisfy the market
demand.
 Target Industry: Retail
 Target Customers: All retailers from wholesalers to
companies in need of carriage items as well as advertising
firms who would like to market a brand through our
products (carriage bags).
 Target Consumers: people who shop from these retailers.
 Satisfying need: need for replacement of plastic bags in the
country. It will also cut the company’s marketing cost as we
will spend less on advertisement.
 Demand for our product: Looking at the current scenario
in Tanzania, the demand for our products will increase
because they are eco-friendly, reusable and are fashionable
to stylish people.
5. OPERATIONS

The manufacturing process will not completely be labor intensive nor capital
intensive. The process will differ from client to client based on quality
requirements. As we will be offering different products, production process for
each item differs.

This plan assumes that the machinery is utilized at an above average capacity
and the labor is trained.

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 Custom bags be it paper bags or non woven bags will be done in batches and
the general sizes will be made on a continuous basis.

We will normally have one shift per day and if there are orders to be completed
then only the company will run overtime.

The supervisor present at the site will be answerable for the quality and
consistency wherein every 20 bags will be rechecked for defects.

The manpower & machinery taken in this plan is based on the production
target requirement.

5.1 ORDERING PROCESS (VALUE CHAIN)

1. Receive order from client

2. Placing order for the material
3. Material print if demanded (for custom made)
4. Production
5. After completion, bags are dispatched.

5.1 NON WOVEN BAGS PRODUCTION CAPACITY

Our non-woven bags making machine has a maximum rate of 120pcs/min.

Therefore by utilizing an above average rate of 65pcs/min keeping in mind
thatwe will be operating 10 hours a day, then we will be producing 650 bags in
a day. Thus producing a monthly total of 16,900 bags.

5.2 PAPER BAGS PRODUCTION CAPACITY

By utilizing an average of 400m2 of paper can be produced in a days’

operation out of which an average of 300 pcs can be produced in a day. Thus a
total of 120,000 bags can be produced in a month.

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6. MACHINERY

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 7. MANAGEMENT SUMMARY

Laiqa Fabrics Ltd. Is a limited liability corporation whose management

philosophy is based on responsibility, hardwork and sheer desire for success.

The Company’s key officers are:-

 MUNIRBEGUM HASSAN KHAN (Managing Director) – 20

SHARES
 MOHAMED ABDULHAQUE BORA (Director) – 20 SHARES.

Our initial workforce will comprise of 5 staff members who will rank as follows:

 Director & Managing Director (both owners with equal

shares)
 General Manager
 Sales manager
 Plant Technician
 General worker
 Cleaner

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 FIG: 2
COMPANY STRUCTURE

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 7.1 FINANCE

7.2 CASHFLOW ANALYSIS

Below is Laiqa Fabrics Ltd. profoma cash flow projections for the first three
months.

Key Assumptions:

Tanzania’s current population = 58.01 million. (From

www.worldpopulationreview.com).
Those between the age of 15 – 64yrs make 52% of the total population i.e
52% of 58.01M = 30.2 million
 Estimated number of initial customers = 30.2M/2 = 15.1M
 According to www.theworldcounts.com, the average usage of carriage
bags by a single person is 25 pieces per month.

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 Therefore, Total estimated monthly consumption is,

25 pcs*15.1M = 377.5 million carriage bags

 Average price of one carriage bag = Tsh 440/=

Hence Total First month sales are,
440 * 377.5 M= 166,100

 Mothly sales revenues will be increasing by 10% due to promotions.

 Monthly payments to trade suppliers will be increasing by 15% to satisfy
the demand by the additional customers.

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From the above statement we can see that if the plan works, monthly cash
flows will increase by 16.4%((39,187/33,670 *100)-100) during the first month
of operations, and by 25.4%((49,155.7/39187*100) – 100) during the second
month of operations.

This project document has given details on a business plan by Laiqa Fabrics
Limited. In view of the above we hope that potential investors will join us in
future to see us attain a world class caliber when it comes to eco friendly
carriage bags production.

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