LARSEN & TOUBRO LTD

Non Woven
Bags

ECONOMICAL & ECO FRIENDLY

Presented by:
123456716th May 15

Larsen & Toubro Limited : All rights reserved

Hardik Umrania
Harshit Mathur
Harish Arwade
Isha Batra
Kaushal Sheth
Leon Bhuyan
1
Madhusoodhanan

Contents

INTRODUCTION

OBJECTIVES

MANUFACTURING PROCESS

MARKETING

RISK ANALYSIS

SWOT

BUDGET & IMPLEMENTATION SCHEDULE

FINANCE
2

Introduction Non
Woven Fabric Bags

This project report will add details to technical and commercial aspects of
Non Woven Fabric Bag Production.
Nonwoven Fabric Bags
Recyclable and Reusable
v/s
Plastic Bags
Non-Bio-Degradable in nature

Product- Non Woven Fabric Bag

Company Name GREEN BAGS Pvt. Ltd.

Bag Size Width: From 100mm to 800mm

Length: From 200mm to 500mm (As per the customers requirement)
Application Shopping bags, Hotel bags, Travel Bags, Retail Bags, etc.,

Objectives

To do a profitable business by selling non-woven fabric bags

Making low cost and fashionable non-woven carry bags

To make non-woven products as a part of our daily living

Create a pollution free environment

Creating awareness about non-woven products

Manufacturing Process
Raw
material
inspection

Cutting

Printing

Ultrasonic
Stitching

Final Inspection

Packing
5

Non Woven Fabric Supplier

Knack Packaging Pvt. Ltd. Ahmedabad
Shree Shyam Nowo Textiles, Ahmedabad
Vishal Synthetics, Kadi Kalol, Gujarat

Ultrasonic Sewing
Technology
Bonding Method
High Frequency Mechanical Sound Waves are
created in the range of 20 kHz to 1 gHz

A molecular bond between this non woven fabric is

formed
7

Machines Required
Ultrasonic Heat Treating Machine
Technical Parameter:
. Production speed 20-80pcs/min
. Bag width 100-800mm and Bag length 200-500mm
. Nonwoven fabric specification (G.S.M) 30-100
. Power supply 220v
. Total power 11KW
. Overall size 790015001800mm( Floor Space Required 175 sq. ft)
8

Fully Automatic NonWoven M/c

Machines Required
Features:
Electro-mechanical integrated
Automatic slotting device / punching device
Firm appearance after sewing
Feed off automatic shutdown, auto-punch
While at the end of the roll ultrasonic sewing
While cutting edge automatic closure, automatic nesting
10

Machines Required
Printing Machine
Technical Parameter:
. No. Of Colors: 1 To 8
. Printing Speed:50 pcs / min
. Power Requirement: 16 Kw
. Floor Space Requirement: 100 sq ft.
. Web Width: 500 mm To 2050 mm

The Market Prospect

Positives
Rising per capita income
Government restrictions on the use of Polythene bags
Can be used as Fancy bags, gift bags etc.
Challenges
Setting up the entire distribution network and establishing the sales
force
Increasing the awareness level about NW bags especially in the
rural areas
Price

12

The Market Prospect

(contd..)
Considering Gujarats Urban areas, Places like
Ahmedabad, Vadodara, Surat , Rajkot ( Population is
around 1.5 Crores)
Daily bags usage ( considering 20% of the population, as
per the above data ) = 30 Lakhs
Considering NW bags market share to be 20%, potential
market = 6 lakhs bags per day, per month = 180 lakhs
(approximately 180 Tons)

13

Alternates & Substitutes

Paper Bags:
- Manufacturing process of paper bags results in plenty
of leftover waste.
- Environmental Damage
- They are meant for short term usage.
Plastics or Polyethylene Bags:
- Non Biodegradable

14

The Marketing Mix

Nonwoven bags

160 Rs. / kg;

75 bags per kg
The retail stores, shopping centres, Retail
chains such as Big Bazaar, D-Mart,
Stationary shops, Jewellery stores, Sweet
shops

Promotional efforts to establish a network

with the retail chains

STP Framework
Segmentation: Based on Geography
and Demography, creating a network is
easier in urban areas; distribution to
semi urban areas will be easy
Targeting: It is a B2B model and the
focus is to target the retail chains,
clothing brands, shoe brands, etc.,
Positioning: Environment Friendly,
Low Cost, Trendy, Innovative

Risk
Analysis!

Entry Barriers: Low, anyone having decent

capital can enter the industry, as there are no
market regulations as well
Threat from existing customers: Low, as there
are not enough existing competitors, huge
market yet to be tapped
Threat from substitutes: Good, as number of
products already in the market which are
potential substitutes, ex Polythene bags
Exit Barriers: Low, no exit criteria as such,
companies can exit as and when they feel like

SWOT Analysis
Strength
Eco-friendly in nature
Lower price
Less competitors
Quality of product

Weakness
Plant capacity
Not useful in monsoon season
compared to plastic bags
Less scope for advertising

Opportunities
Increasing awareness of
hazards of plastic
Ban imposed on plastic bags in
many areas
Bags are used everywhere
Never end packaging and
visibility provides added
advantages

Threats
Government polices
Inflation Risk
Introduction new product similar
to plastic bags
Volatility of interest rate risk
Increase raw material price
Environmental risk

Weakness - Mitigations
Plant capacity: Additional machines can be added after
getting return in a year or two
Not Useful In Monsoon Season: Expiry date for this bag,
used for carrying food will be mentioned
Shortage Of Working Capital: Flexible financial strategy
implies surplus cash and little short term borrowing.
However to start the operation of our business, we need to
take both short and long term loans. Though the estimated
net income for the first two years of our business will be
positive. Hopefully reduces the risk of experiencing financial
distress

Threats - Mitigations
Government policies: Change in government can result in
change in rules and regulation for new players
Inflation risk: High growth rate of price may lead to
decrease in investment in various sectors or it may increase
the price of the product that will directly affect the revenue
Volatility of interest rate risk: We will take short term loans
more than long terms at the initial stage. Since short term
interest rates are more volatile than longer rates; this may
lead to interest rate risk for our company
Environmental risk: Location we have chosen is least
disaster prone area

Source of Funding
Registration of Company with Ministry of Micro,
Small and Medium Enterprises (India)
Eligibility of loan from Govt. Recognized Banks up to 1
Cr. at a rate of 12 % P.A for at-least 10 years.

Setting up of the company in semi urban area of

the state of Gujarat provides an interest subsidy
of up to 6 % under Gujarat Textile Policy 2012,
Scheme-2

21

Basis & Presumption

Pre processed Non-Woven Fabric Price Rs. 123/kg

Selling Price of the Bag- Rs. 160/ kg
Production rate at 60 % capacity- 20 MT
No. of operator required :- 1 at a monthly salary of Rs.
10,000/No. of Helpers required :- 2 at a monthly salary of Rs. 7,000/No. of Market rep. cum sales person:- 2 at a monthly salary
of Rs 15,000/Area required : 1500 sq. ft. Rent payable at Rs. 7,500/- per
month
Credit Sales at 15 days of credit.
Wastage Sales are 50 % cash and 50 % credit

Implementation Schedule
Sr. No.

Activity

Expected Time

Renting Land for Facility

1 month

Project Filing Under MSME

7 days

Financial Arrangements

2 Months

Procurement of Machinery

2 Months

Installation and Commissioning

2 Months

NOC from government

1 Months

Trial Run

7 month onwards

Investment
Particulars
Automatic Ultrasonic Sealing M/C

Amount(Rs.)
16,00,000.00

Printing M/C

4,00,000.00

Investment in Electrical Instalment

(stabilizer, compressor etc.)

2,75,000.00

Stores & Spares

40,000.00

Furniture, Tools, Fixtures

25,000.00

Working Capital for 30 days

24,60,000.00

Total Investment

48,00,000.00

Cost Analysis

Overhead
Production Cost( AT 60 % Capacity)

20MT

Raw Material Cost per kg

Rs. 123.00

Consumables(electricity, oil etc. ) per

day

Rs. 200.00

Profitability Analysis(per month)

Amount (Rs.)

Amount (Rs.)

Sales (A)
Bag Sale( 19800 x 160)

31,68,000.00

Wastage( 200 x 40)

8,000.00
31,76,000.00

Expenditures (B)
Raw Material
Cost( 20000 x 123)

24,60,000.00

Consumables( 200 x 25)

5,000.00

Labour Cost

54,000.00

Rent

7,500.00

Other Expenses

12,500.00
25,39,000.00

Profitability Analysis(per
Amount (Rs.)
Amount (Rs.)
month) (contd..)
Profit Before Depreciation, Interest
& Tax (A-B)

6,37,000.00

PBDIT %

20.05

Depreciation @ 17.55 % P.A.

29,250.00

Interest on Investment @ 12% P.A.

48,000.00
77,250.00

Profit Before Tax (PBT)

5,59,750.00

PBT %

17.62

Indirect Taxes
VAT- 4%

1,27,040.00

Excise- 12%

3,81,120.00
5,08,160.00

Profit After Tax

51,590.00

LARSEN & TOUBRO LTD

THANK YOU
28
16th May 15

Larsen & Toubro Limited : All rights reserved