Business Plan for Establishment of Liquid Detergent Plant

8/19/2019 Business Plan for Establishment of Liquid Detergent Plant

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TABLE '( C'NTENTS

I) SU**AR+))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))%

II) PR'DUCT DESCRIPTI'N AND APPLICATI'N)))))))))))))))))))))))))))))))))))))))))))))))#

III) *AR,ET STUD+ AND PLANT CAPACIT+)))))))))))))))))))))))))))))))))))))))))))))))))))))))-

I.) *ATERIALS AND INPUTS)))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))/

.) TEC0N'L'G+ AND ENGINEERING))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))1

.I) 0U*AN RES'URCE AND TRAINING REQUIRE*ENT))))))))))))))))))))))))))))))))))2

.II) (INANCIAL ANAL+SIS))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))))%$

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I. SU**AR+

This profile envisages the establishment of small scale plant for the production of liquid

detergent with a capacity of 30 tons per annum. Liquid detergent is extensive used in

households, guest houses, hotels, canteens, hospitals, schools, higher institutions, offices, etc., as

a general cleaning agent.

The country’s requirement of liquid detergents is largely met through import. The present !0"#$

demand for liquid detergents is estimated at !%% tons. The demand for liquid detergents is

pro&ected reach 3'3 tons and #!% tons by the years !0!" and !0!(, respectively.

The principal raw materials required are )odium lauryl ether sulfate or )L*),

+ocodiethanolamide or +*-, )T, +oo/ing salt, ye water soluble and )ynthetic

1ragrance. -ll raw materials can be obtained locally.

The total investment cost of the pro&ect including wor/ing capital is estimated at 2irr #0,000.

2oth fixed investment and initial wor/ing capital have equal #0 share.

The pro&ect is financially viable with an internal rate of return 455$ of !#! and a net present

l e 67$ f 2i 839 000 di ted t "0


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PRODUCT DESCRIPTION AND APPLICATION

- liquid detergent is a surfactant or a mixture of surfactants with ;cleaning properties in dilute

solutions.; These substances are usually al/yl ben


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MARKET STUDY AND PLANT CAPACITY

A. MARKET STUDY

1. Past Supply and Present Demand

The country=s requirement of detergents is largely met through import. -lthough some

brands of detergents in a limited quantity are locally manufactured, the data which is

published by the +entral )tatistical -gency on the survey of >edium and Large )cale

and *lectricity 4ndustries lumps together with soap. ?ence, in order to analy


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believed to indicate the present demand. -ccordingly, present demand year !0"#$ for

detergents is estimated at %'3 tons.

)ince there is no disaggregated data on the amount of powdered and liquid detergents,

the views of /nowledgeable people in the area have been collected. -ccordingly, it was

learnt that about (# of the total volume of imported detergents constitute powdered and

the remaining 3# liquid. Ta/ing this as a base, the current demand for liquid detergent

is estimated at !%% tons.

2. Demand Pr$+e,t*$n

The factors that influence the future demand for detergents are numerous. -mong the

ma&or ones population growth, income rise, urbani


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!0!03%".(8

!0!"3'3.'3

!0!!8"%.#%

!0!388!.(3

!0!8

8('."9

!0!#8'%.33

!0!(#!%."%

The demand for liquid detergent will grow from !'8 tons in !0"( to 3'3 tons and #!%

tons by the years !0!" and !0!(, respectively.

3. Pr*,*n and D*str*but*$n

The selling price is based on ;+ostlus >ethod;. - profit mar/up of !# over the total

d t t i bl d titi i ll t thi i iti l t A it


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MATERIALS AND INPUTS

A. MATERIA/S

The principal raw materials required are )odium lauryl ether sulfate or )L*),

+ocodiethanolamide or +*-, )T, +oo/ing salt, ye water soluble and )ynthetic

1ragrance. -ll raw materials can be obtained locally. The total annual cost of raw material at full

capacity operation is estimated at 2irr "!(,8#0.00. The annual requirement of raw material and

their estimated costs are presented in Table 8.".

Table .1: A""UA/ RE0UIREME"T OR RA6 A"D AU7I/IARY MATEIRA/S A"D

T2EIR OST

"$. Item Des,r*pt*$n 0uant*ty *n t$ns $st %'((( )*rr&

")odium lauryl ether sulfate or )L*) !.80 89.00

!+ocodiethanolamide or +*- ".#0 8#.00

3)T 0.'0 "(.!0

8+ /i lt " #0 % #0


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T$tal 8.1(

V.


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TECHNOLOGY AND ENGINEERING

A. TE2"O/O!Y

1. Pr$du,t*$n Pr$,ess

The process of manufacture consists as follow@

• >ix sodium lauryl ether sulfate and water. -dd small amount of water and mix it

well.

• -dd coconut diethanol and mix it well using the stirrer. +ontinue mixing until it

become stic/y. -dd small amount of water while mixing to avoid creating

bubbles. )et aside the +*-)L*) mixture when it turned cream.

• 4n a separate mixing bowl, mix )T. )et it aside.

• :et your cream and mixed it again slowly. Bhen the mixture bubbles, add slowly

the )T mixture while mixing using the electric mixer.

• 4n a separate mixing bowl, dissolve salt before adding it to the )T and +-


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B. E"!I"EERI"!

1. Ma,4*nery and E;u*pment

The total cost of equipment is estimated at 2irr 30,#00.00, all of which is required in

local currency. The list of equipment required for the envisaged plant is given in Table

#.".

Table 9.1: /IST O E0UIPME"T A"D T2EIR OST

"$. E;u*pment Un*t 0uant*ty Un*t Pr*,eT$tal $st

%)*rr&

Sa


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HUMAN RESOURCE AND TRAINING REQUIREMENT

A. 2UMA" RESOURE RE0UIREME"T

Total human resource required is ( persons. The total annual cost of human resource is estimated

at 2irr "!',000. The details of the human resource requirement and the estimated annual labor

cost including employees’ benefit are given in Table (.".

Table 8.1: 2UMA" RESOURE RE0UIREME"T A"D ESTIMATED /A)OR OST

%)IRR&

"$. Des,r*pt*$n 2ead $unt M$nt4ly Salary Annual Salary

" >anager " !,#00.00 30,000.00

! -ccountant and cashier " !,000.00 !8,000.00

3 Dperator " ",#00.00 "9,000.00

8 -ssistant Dperator " ",000.00 "!,000.00

# :uard ! ",(00.00 "',!00.00

Sub T$tal 8 ?=8((.(( 1(3=-((.((

Empl$yees bene


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FINANCIAL ANALYSIS

The financial analysis of the liquid detergent pro&ect is based on the data presented in the

previous chapters and the following assumptions@

)ource of finance "00 equity

iscount cash flow "0

-ccounts receivable "# days

5aw material local "# days

Bor/ in progress " day

1inished products "0 days

+ash in hand # days

-ccounts payable 0 day

A. TOTA/ I"ITIA/ I"#ESTME"T OST

The total investment cost of the pro&ect including wor/ing capital is estimated at 2irr #0,000.

2oth fixed investment and initial wor/ing capital have equal #0 share each.


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C. I"A"IA/ E#A/UATIO"

1. Pr$


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VIII.


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Appendix 7.A: FINANCIAL ANALYSES SUPPORTING TABLESAppend*H .A.1

"ET 6ORKI"! APITA/ %*n ((( )*rr&

Des,r*pt*$nDays $aterials

Local materials "# 8 8 # # # # # # # #

4mported materials '0

c$ Bor/inrogress " 0 0 0 0 0 0 0 0 0 0

d$ 1inished roducts "0 ( % 9 ' ' ' ' ' ' '

".3 +ashinhand # " " ! ! ! ! ! ! ! !

-. urrent l*ab*l*t*es C C C C C C C C C C

!." -ccounts payable creditors$

3. 6$r>*n ,ap*tal

3.1 "et $r>*n ,ap*tal %1& C %-& -9 -? 31 39 39 39 39 39 39 39

3.- In,rease *n $r>*n ,ap*tal -9 3 3 3 C C C C C C


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Append*H .A.-

PRODUTIO" OST %*n ((( )*rr&

$st *temPr$du,t*$n years

1 - 3 9 8 ? B 1(

+apacity utili


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Append*H .A.3

I"OME STATEME"T %*n ((( )*rr&

Des,r*pt*$nPr$du,t*$n Years

1 - 3 9 8 ? B 1(

T$tal Sales Reenue319 38( (9 9( 9( 9( 9( 9( 9( 9(

/ess $st $< !$$ds S$ld 1- 11 19? 19 19 1( 1( 1( 1( 1(

!r$ss Pr$


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Append*H .A.

)A/A"E S2EET %*n ((( )*rr&

Des,r*pt*$nYear Pr$du,t*$n Years

( 1 - 3 9 8 ? B 1(

*Hed assets 1ixed investment !# !# !# !# !# !# !# !# !# !# !#

Total 1ixed -ssets !# !# !# !# !# !# !# !# !# !# !#

Less acc. epreciation # "0 "# !0 !# !# !# !# !# !#

"et


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Append*H .A.9

DISOU"TED AS2 /O6 %*n ((( )*rr&

Des,r*pt*$nYear Pr$du,t*$n Years

)$$>

#alue

( 1 - 3 9 8 ? B 1( 11

T$tal as4 In

Business Plan for Establishment of Liquid Detergent Plant

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