TISSUE PAPER CONVERSION PLANT KSIDC

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PROJECT PROFILE ON

TISSUE PAPER CONVERSION PLANT

Prepared by:

Kerala State Industrial Development Corporation

September 2012

TISSUE PAPER CONVERSION PLANT KSIDC

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TISSUE PAPER CONVERSION PLANT

PROJECT SUMMARY

1 The Proposal : To set up a Tissue Paper Conversion Plant

2 Proposed Location of the project Ernakulam Dist.

3 Products/Services and installed capacity : Facial Tissue Paper-96000 Pieces/Hour

Wet Facial Tissue -7200 Pieces/Hour

4 Market : Tissue paper industry has emerged as a new sub-

segment within the paper industry in India. Tissue

market is at a very nascent stage in India. Due to

increasing disposable income, the consumers are

adopting the tissue culture. The Indian market for

tissue paper is only 30,000 tonnes per annum,

while that in China is 3.0 million tonnes. Facial

Tissue especially wet tissues will have a good

market considering the present climatic conditions

in India.

5 Plant & Machinery

: The equipments are proposed to be imported

from China

6 Cost of Project : Rs. Lakhs

: Land & Land Development 30.00

Building 75.00

: Plant & Machinery 70.00

: Utilities 20.00

: Misc. Fixed Assets 17.00

: Deposits 10.00

: Consultancy Fee 5.00

: Prel. & Preoperative Expenses

(Including Interest During

Construction)

62.81

: Contingency 24.25

: Margin Money for WC 35.94

Total 350.00

7 Means of Finance : Promoters Contribution 175.00

: Term Loan 175.00

Total 350.00

8 Profitability at optimum level : Optimum Utilization (% of installed

capacity)

80%

: Sales Turnover (Rs. lakhs) 725.76

: Profit before interest, depreciation &

tax (Rs. lakhs)

166.90

: Cash Profit (after interest)

(Rs lakhs )

96.36

: Net Profit (PAT) (Rs. lakhs) 80.90

9 Financial Indices : Debt Equity Ratio 1:1

: DSCR (average) 2.72

: Break Even Point % 39.55

: IRR (%) 25

: Pay Back period (Years) 3.63

TISSUE PAPER CONVERSION PLANT KSIDC

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: Moratorium 1 Year

Implemen

tation

Period + 1

Year

10 Manpower : 20 Persons

11 Raw Materials

Facial Tissue

Facial wet Tissue

:

:

Jumbo Tissue Paper Roll-100 cm wide

Jumbo non woven fabric-15 cm wide

12 Utilities - Power : 100 KVA

13 Implementation Period : Implementation period considered at 12 months

PROJECT DETAILS

THE PROPOSAL

The proposal is to setup a tissue paper conversion plant to produce facial tissue paper and wet facial tissues. The

plant is proposed to be imported from China. The total cost of the project works out to be Rs. 350.00 lakhs.

TECHNICAL DETAILS

Location & Site:About 50 cents of land is required for setting up of the plant.

Plant & Machinery :The following equipments are proposed

Sl.

No.

Equipment Cost in Rs.

Lakhs

Facial Tissue Plant

1 Facial Tissue Conversion

line

20.00

2 Facial Tissue Automatic

packing machine

30.00

Wet Tissue Plant

3 Full Automatic two Piece

Package Wet Tissue

Machine (Fully Automatic

including packing)

20.00

Total 70.00

The plant and machinery can be imported either from China or Europe where the technology is very much

advanced.

Power Requirement:The requirement of power is estimated at 100 KVA.

Manpower:The total manpower requirement for the administration of the facility is 20 numbers. The details of the

employees with designation and numbers are given below:-

TISSUE PAPER CONVERSION PLANT KSIDC

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Managerial/Supervisory 2

Skilled 2

Semi Skilled 2

Un Skilled 6

Security Staff/Other Staff 4

Marketing Salaries 4

Total 20

Implementation Period: A one year implementation period is envisaged.

MARKET ASSESSMENT

Tissue paper industry has emerged as a new sub-segment within the paper industry in India. Tissue market is at a

very nascent stage in India. Due to increasing disposable income, the consumers are adopting the tissue culture.

The Indian market for tissue paper is only 30,000 tonnes per annum, while that in China is 3.0 million tonnes. Facial

Tissue especially wet tissues will have a good market considering the present climatic conditions in India.

FINANCIAL ASSESSMENT

Cost of the project and its viability indicators are described below

Cost of Project

The total cost of the project envisaged is about Rs. 350.00 lakhs. The breakup of the cost is summarized below.

Items Cost

(Rs. Lakhs)

Land & Land Development

(50 cents of land @ Rs. 50000 per cent)

30.00

Building(10000 Sq. Ft @ Rs. 750 per Sq. Ft) 75.00

Plant & Machinery

Facial Tissue Conversion line 20.00

Facial Tissue Automatic packing machine 30.00

Full Automatic Wet Tissue Machine (2 Pieces

per pack fully automatic including packing)

20.00

Utilities 20.00

Misc. Fixed Assets 17.00

Deposits 10.00

Consultancy Fee 5.00

Prel. & Preoperative Expenses

(Including Initial Marketing expenses,

Interest During Construction etc.)

62.81

Contingency 24.25

Margin Money for WC 35.94

Total 350.00

TISSUE PAPER CONVERSION PLANT KSIDC

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Means of Finance

The means of finance proposed is as follows:

Rs. in Lakhs

Promoters 175.00

Term Loan 175.00

Total 350.00

The Debt Equity Ratio works out to 1:1 for the project.

Cost of operation and Profitability

The assumptions underlying profitability estimates are given below.

Items Norms & Assumptions

I CAPACITY AT 100% 480 TPA of tissue paper convesion

Average Annual Capacity Utilization 1yr

50%

2yr

60%

3yr

70%

4yr

80%

5yr

80%

II INCOME

Facial Tissue

50 pieces pack

2 pieces wet tissue pack

Rs. 12 per pack (Ex factory)

Rs. 2 per pack(Ex factory)

III EXPENDITURE-(100% capacity ; Major expenditure)

Raw Material

facial tissue roll

non woven tissue fabric

Rs. 80000 per MT

Rs. 231000 per MT

Cost of Consumables Rs. 20.80 lakhs per year

Salary/Labor cost

Rs. 32.18 lakhs for 50 production staff

Rs. 8.64 Lakhs for admin/managerial staff

Power & Fuel Charges Connected Load 100 KVA;

FC per month : Rs. 270 per maximum demand per

Month

Variable Charge : Rs. 4 per KWH

Factory Overheads Rs.10 lakhs/year

Administration overheads Rs. 20.00 lakhs is estimated for the first year of

operation towards administrative overheads. 5%

increase is provided for subsequent years.

Selling/Marketing Exp 1% of Sales

Repairs & Maintenance charges 2.5% of fixed assets

Insurance charges 0.25% of fixed assets.

TISSUE PAPER CONVERSION PLANT KSIDC

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CONCLUSION

The proposal is found to be technically feasible and economically viable. The selection of plant has an important

role for its consistency and easiness of operation.

For further details please contact Kerala State Industrial Development Corporation Ltd.

…

Disclaimer: The findings contained in this Project Profile are based on the initial information collated through primary and secondary research, which is indicative in nature. Reference herein to any specific commercial product, process, service by trade name, trademark, manufacturer, or otherwise, does not constitute or imply its endorsement, recommendation, or favoring by KSIDC or any entities thereof.