Office of Development Commissioner (MSME),

Ministry of Micro, Small and Medium Enterprises,

Government of India

Action Plan for Reduction of Imports

&
Project Report for Manufacture of
Corrugated Paper Board and Boxes

Prepared by:
Shri C.S.S. Rao, IEDS
Joint Director
MSME-Development Institute,
Ministry of MSME, Government of India
Hyderabad - 500037
E-mail: cssrao@dcmsme.gov.in

Page | 1
 INDEX

S.NO TITLE PAGE NO

1 EXECUTIVESUMMARY 4

2 INTRODUCTION 8

3 COMMERCIAL DETAILS 10

4 THE PRODUCT AND SERVICES 12

5 MARKET POTENTIAL 14

6 LOCATION OF THE UNIT 17

7 THE TECHNOLOGY 17

8 THE PROCESS 18

9 PROCESS FLOW CHART 20

10 QUALITY ASSURANCE &SPECIFICATIONS 21

11 PLANT &MACHINERY 23

12 SCHEDULE OF IMPLEMENTATION 29

13 GOVERNMENT SCHEMES 30

14 FINANCIAL ASPECTS 33

15 A. FIXED CAPITAL

16 1. LAND AND BUILDING 33

17 2. MACHINERY AND EQUIPMENT 33

18 3. ELECTRICAL INSTALLATION, ERECTION & 34

COMMISSIONING

19 4. OTHER FIXED ASSETS 34

20 5. DETAILS OF OTHER DEPOSITS 35

21 6. PRELIMINARY & PREOPERATIVE EXPENSES 35

Page | 2
22 B. ECONOMICS OF WORKING

23 1. RAW MATERIALS & CONSUMABLES 35

24 2. MAN POWER/EMPLOYMENT DETAILS 36

25 3. ELECTRICITY LOAD 36

26 4. OTHER CONTINGENCIES 36

27 5. WORKING CAPITAL ESTIMATES 37

28 C. MEANS OF FINANCE 37

29 D. SOURCE OF FINANCE 37

30 E. BASIS & PRESUMPTIONS 38

31 FINANCIAL ANALYSIS

32 A. ESTIMATED COST OF PRODUCTION & PROFITABILITY 39

33 B. CASH FLOW STATEMENT 40

34 C. DEBT SERVICE COVERAGE RATIO (DSCR) 41

35 D. PROJECTED BALANCE SHEET 42

36 E. RETURN ON INVESTMENT (ROI) 43

37 F. BREAK EVEN POINT (BEP) 43

38 CONCLUSIONS 44

39 LIST OF IDENTIFIED CLUSTERS (ANNEXURE-I)

40 STATE/UT-WISE REGISTERED UNITS (ANNEXURE-II)

41 COUNTRY-WISE IMPORT DETAILS(ANNEXURE-III)

42 COUNTRY-WISE EXPORT DETAILS(ANNEXURE-IV)

43 PLANT & MACHINERY QUOTATIONS (ANNEXURE-V)

Page | 3
 Executive Summary
As per the Public Procurement Policy of Ministry of MSME, Government of India, 358

manufactured items are reserved for exclusive procurement from MSEs by Central

Ministries/Departments/PSUs. This is one of the salient features of the policy. However,

many of these reserved items including Corrugated Paper Board and Boxes are being

imported from various countries. During 2017-18, 2018-19 and 2019-20, the imports of

Corrugated Paper Board and Boxes stood at Rs.39 crore, Rs.47 crore and Rs.93 crore

respectively and the imports are almost double the value of previous year.

As the product being non critical and considering the huge presence of over 14,000

manufacturing MSEs across the country, the imports to the tune of Rs.93 crore is indeed a

matter of concern and matter to be looked into. It is, in this backdrop, AS&DC (MSME),

Ministry of MSME assigned the responsibility of study of the domestic manufacturing

scenario including imports & exports and to prepare a roadmap to encourage domestic

manufacturing of Corrugated Paper Board and Boxes in order to achieve Atmanirbhar

Bharat.

As a part of the study, various Government Departments, Organisations, Agencies,

Associations, manufacturing units, machinery manufacturers, such as Additional Director

General of Foreign Trade(ADGFT), Secunderabad, Telangana Chapter of Federation of Indian

Export Organisations (FIEO), Hyderabad,Engineering Export Promotion Council (EEPC) of

India, Hyderabad, Directorate General of Commercial Intelligence and Statistics (DGCIS),

Kolkata, Chief Commissioner of GST and Customs, Hyderabad, Confederation of Indian

Industry (CII), New Delhi, Dalit Indian Chamber of Commerce and Industry (DICCI), Pune,

Page | 4
Federation of Indian Chamber of Commerce and Industry (FICCI), New Delhi, Commissioner

of Industries, Government of Telangana,Corrugated Box Manufacturers Association of

Telangana, Hyderabad, Chief Commissioner of GST and Customs, Hyderabad have been

approached for collection of data/information/details and the same have been

utilised/incorporated in preparing the Detailed Project Report (DPR), as per the template

provided by Office of DC (MSME).

The opinions/suggestions/inputs of various stakeholders are as under:

 The Joint Director & Head of Office, Indian Institute of Packaging (IIP), Hyderabad,

Ministry of Commerce & Industry, Government of India, opined as under:

 Availability of quality raw material for the manufacturers at reasonable price

is one of the issues for the box manufacturers to be competitive in the market.

 Lack of technology to manufacture requisite items such as boxes for packaging

& shipment of certain pharma products at controlled temperatures.

 Most of the corrugated box manufacturing industries in and around have poor

process layouts, which are impacting quality of the product.

 Confederation of India Industry (CII), while appreciating this initiative of Government

of India to understand the root cause of the problem, submitted the following inputs

in consultation with their members:

 The cost of manufacturing is dependent on degree of automation, which

requires high initial investments. For an MSME to invest into automation, they

need the clarity in terms of market potential available for undertaking the

specific activity.

Page | 5
  Normally, buyers do indicate quantities, but most of the time they are inflated

and also not enough to take a decision for the intervention of automation.

 Government may like to share the Import data along with the quantity of

import to all Indian manufacturers who are making the products of the same

HSN Code which is being imported.

 Encouragement for cluster manufacturing for each and every item, so as to

produce a world class product in bulk quantity and compete with global

markets in terms of quality and standards.

 Shri M.L. Agarwal, President, Corrugated Box Manufacturers Association of

Telangana, Hyderabad opined that the total Corrugated Box manufacturing business

in India is worth Rs.30,000 crore approximately with 80 akhs tons of production, the

imports of Rs.93 crore worth Boxes may be treated as small quantity. However,

Government of India may like to encourage prospective entrepreneurs to set up their

own units to contribute in reducing the imports.

 The Association felt that the reasons for imports may be as under:

 Non availability of requisite paper quality in India.

 Fiber quality and quantity is both in short supply in India.

 100% of the boxes are made from recycled fiber and out of which about 40%

of fiber is imported, the strength as compared to paper made from Softwood

long fiber available in EU/ US cannot be matched.

 In case boxes need very high strength paper to be used, the same needs to be

imported from Scandinavian countries or US, which leads to cost enhancement

and time delay.

Page | 6
  In certain cases, some foreign buyers (importers) may specify preferred Box

supplier.

 Shri B. Ramesh, Proprietor, M/s. Sai Daksha Packaging Pvt. Ltd., Hyderabad, one of

the manufacturers from Hyderabad stated that certain pharma products need to be

packed& shipped in boxes that can accommodate sub-zero temperatures. Industries

in and around Hyderabad do not possess such technologies for manufacture of boxes,

which is leading to imports.

Taking in to consideration of the above inputs/suggestions, a semi-automatic technology has

been identified in consultation with experts, machinery manufacturers and prepared a

Detailed Project Report (DPR). The salient features of the DPR are as given below:

 Total Installed capacity of the proposed unit is 6000 MT per annum.

 Total investment of the Project is Rs.23 crore including the Fixed Capital of Rs.3 crore

and Working Capital of Rs.20 crore.

 Providing direct employment to 100 persons with an indirect employment to

about50 persons.

 Break Even Point (B.E.P) is 43.19%.

 Debt Service Coverage Ratio (DSCR) is 1.90.

 Debt Equity Ratio is 3:1.

 Return on Investment (RoI): 29.12%

 Current ratio: 1.41

Page | 7
 DETAILED PROJECT REPORT

Introduction:

Packaging plays an important role in allowing products to respond to the demands and needs

of modern consumers. Packaging is one of the most cost-effective weapons in a marketer’s

arsenal. It requires a relatively self-effacing investment, lasts a long time. The role of

packaging in business has undergone a major change, and it has today assumed a very major

role. Traditionally, packaging was defined as the activities of designing and producing the

wrapper or container for a product. This definition is no longer adequate. Today, packaging

has emerged as a major technology in itself, which is highly complex and specialized, highly

multi-functional, cross functional and very application oriented. Corrugated paper board

boxes are one of the safest and efficient means of packaging and shipment of goods.

Corrugated board consists of a flat layer of paper sheet (liner) glued on one or both sides of

a corrugated paper. The corrugated board is made by passing two layers of Kraft paper

through corrugating machine. One layer of paper becomes corrugated after being passed

through the heated rolls and other is brought into contact with it after the former having

glued at tips. When only one liner is used, the product is known as “Single face” or “two ply”

board. This board is flexible in one direction. When the corrugated medium is combined on

both sides with flat sheets, it is known as double faced or “3-ply board”. Similarly, board can

be pasted to form thicker boards i.e. 5-ply, 7-ply and 9-ply etc.

Page | 8
Applications of corrugated board boxes:

The corrugated board boxes are being used for the packing of industrials as well as consumer

goods. They are used for packing of chemicals, drugs, tobacco, engineering goods, canned

and bottled goods confectionary, textiles, fruits, vegetables, potteries, footwear, glassware,

medical instruments, photographic equipment and a number of other products.

Advantages of Corrugated Board Boxes:

 Light in weight (freight advantage).

 Cellular structure with high compressive strength, resiliency & shock resistance.

 Can be stored conveniently in folded condition when not in use, thus saving storage

space.

 Can be attractively printed, thus advertising advantage.

 By lining, lamination or coating, they can be made water resistant and resistant to

other adverse conditions.

 Easy to fabricate.

 These boxes are re-usable

Page | 9
Commercial details

I. HSN codes for the product Corrugated Paper Board and Boxes

1. 48191010 –Boxes of Corrugated Paper and Paper Board

2. 48191090 – Cartons & Cases of Corrugated Paper & Paper Board

II. NIC codes for of the product of Corrugated Paper Board and Boxes

1. 17021 Manufacture of corrugated paper and paperboard

2. 17022 Manufacture of corrugated paper board containers

3. 17023 Manufacture of card board boxes

4. 17024 Manufacture of sacks and bags of paper

5. 17029 Manufacture of other containers of paper and paperboard n.e.c

III. Details of the Clusters:

There are 19 identified Corrugated Paper Board/Packaging clusters across the country.

These clusters have been identified by MSME-DIs for carrying out various interventions

under the schemes of Office of DC (MSME) for their growth and sustainability. The list of the

identified clusters along with other details is placed at Annexure-I.

IV. Scope for establishment of the units:

The units can be established anywhere in India after undertaking necessary local market &

demand survey, subject to availability of necessary infrastructure, manpower, raw material,

etc.

V. Data of registered Units:

As per the data available on Udyam Registration portal, 14,530 MSMEs are registered under

the activity corrugated paper, paper board and paper board containers manufacturing. Out

of these MSMEs, 9034 are Micro, 5200 are Small and 296 are Medium category. The

Page | 10
State/UT-wise unit details are placed at Annexure-II. The prominent industries in the

manufacture of Corrugated Boxes are:

1. M/s. Canpac Trends Pvt. Ltd., Ahmedabad, Gujarat

2. M/s. Multipack, Gujarat

3. M/s. Hariwansh Packaging Pvt. Ltd., Nagpur, Maharashtra

4. M/s. Trident Paper Box Industries, Gujarat

5. M/s. Kapco Packaging Company, New Delhi

6. M/s. TGI Packaging Pvt. Ltd., Chennai, Tamil Nadu

VI. Data regarding Imports:

As per the details obtained from DGCIS, the imports of corrugated paper, paper board and

paper board containers, from various countries during 2018-19, 2019-20 and 2020-21 (upto

Feb’ 21 only) are worth Rs.268.77 crore, Rs.249.60 crore and Rs.183.01 crore respectively.

The details of country-wise imports for the mentioned period are placed at Annexure-III.

VII. Data regarding Exports:

As per the details obtained from DGCIS, the exports of corrugated paper, paper board and

paper board containers, made by India to various countries during 2018-19, 2019-20 and

2020-21 (upto Feb’ 21 only) are worth Rs.263.64 crore, Rs.282.09 crore and Rs.210.67 crore

respectively. The details of country-wise exports for the mentioned period are placed at

Annexure-IV.

Page | 11
The Products & Services:

The unit/firm is focused on manufacturing corrugated kraft paper board and boxes, which

are an essential material in packing of a product. The products are used for packaging and

shipment of FMCG, electronics, pharma, medical, textile, garments and other related

products. The targeted customers belong to the following sectors:

 Food & beverage

 Electronic goods

 Home & personal care goods

 Chemicals

 Textile goods

 Paper products

 Others (Pharmaceuticals, rubber, and tobacco)

Sector-wise distribution of corrugated packaging in India

Page | 12
 Pictures of Corrugated Boxes

Corrugated box for fruits packaging 5 ply corrugated boxes for shipping

3 ply corrugated box Printed corrugated box

Cake box Bountiful Festive Boxes White tuck in Box

Page | 13
Corrugated board boxes are made with a corrugated sheet of paper attached to the facing of

flat paper, usually kraft by adhesives. In our country, it is mostly produced over a single facer

machine. Here, two paper reels are run together, one layer of paper becomes corrugated

after passing through the heated rolls and the other is brought into contact with it after the

former having glued at the tips. Thus, both get pasted together and are wound in rolls. The

resulting roll is now known as single face/ corrugated roll/board. By cutting this roll with

board cutter and then gluing the corrugated side by a pasting machine and placing 3rd ply of

paper over it double faced or 3-ply corrugated board is produced. This board is kept under

pressure in a sheet pressing machines for some time for setting of the wet glued sheets.

Similarly, board can be pasted to form thicker boards i.e. 5-ply, 7-ply, 9-ply, etc.

Market Potential:

Paper and paper products are versatile industrial raw materials with a wide variety of

application in this era and due to shortage of softwood, wooden packing cases are more and

more replaced with corrugated board- boxes and cartons. As more and more materials are

being used for paper packing, availability of raw materials is also on the rise. Also, recycling

of waste paper is in demand, as it can be used to produce products like paperboards, binding

sheets, sweet box cartons and other packing cartons. 80% of industrial packaging is done

by carton boxes due to effective cushioning, light weight, easy to fabricate, easy for storing,

easy for disposal, no strapping necessary, printing and advertising advantages, must in

export market, recyclability, etc. Over 14,000 existing corrugated paper, paper board and

box making units produce nearly 8 million tonnes of boxes per annum with an estimated

market value of Rs.30,000 crore.

Page | 14
Recently, the trend of colored corrugated boxes has been on the rise. Several organized

retailers are using colored and die-cut corrugated boxes for display and promotional

purposes in their shops. These types of boxes are mainly used in order to attract customer’s

attention as these boxes are very eye catching.

As per the market analysis available, global demand for corrugated boxes is estimated to

increase by 4.2% per annum to 234 billion square meters in 2017. The Global Corrugated

Box Packaging market is expected to grow at a CAGR of 4.37% during the period 2015 to

2022. The increasing industrial activity in manufacturing sector and rising demand for value

added boxes are the drivers for corrugated box packaging market. Corrugated boxes and

solid fiber boxes are the largest and fastest growing segments in corrugated & paper board

boxes market due to recovery of the manufacturing sector. Food and beverage segment

dominates the global corrugated box packaging market due to increasing demand for value

added boxes.

The Indian corrugated box industry is an inevitable part of manufacturing sector which rely

heavily on corrugated packaging for finished goods transportation and

handling. Indian corrugated box industry grew at a CAGR of 23.3% in terms of revenue.

Factors such as increasing demand from fresh food and beverages, home & personal care

goods, electronic goods industries, logistics application, increasing consumer awareness

towards sustainable packaging and growth of the e-commerce industry have propelled the

growth of Indian corrugated boxes market. 5 ply type of box has contributed a significant

share in terms of sales volume in FY2018. 5-Ply type of box has dominated the market as

Page | 15
these boxes are now manufactured through semi/fully automatic machines which increases

the strength of the box and is used in place of 7-ply and 9-ply type of boxes.

Indian corrugated box industry is expected to grow at a CAGR of double digit in between the

FY2018 and FY2023 in terms of revenue due to the elevated demand from the end user

segment in order to store and transport their end products. Increasing the demand of safe

and cushioned packaging of the product will augment the growth of Indian Corrugated box

market. The procurement of latest technology machines by manufacturers in order to make

production fast and accurate will also drive the future of Indian corrugated box industry.

The Covid-19 scenario has resulted significant boost to the e-commerce sector. We see a lot

of design innovation relating to the e-commerce sector. Part of e-commerce growth is related

to the shift in urban to rural demand. Various initiatives of the government relating to

agricultural reforms would definitely boost rural India. The demand will be brought to the

centre stage as we go forward. Most of the brand owners are now focusing on rural demand.

The entire packaging sector is helping in redesigning packs, which suit the rural markets.

In view of the above market analysis findings, the installed capacity of the unit is proposed

to be as 6,000 MT per annum, which is very less as compared to the prevailing market

demand.

Page | 16
Location of the Unit:
The Unit can be established any part of India and piece of land can be under leasehold to the

extent of 500 Sq. Meters for the proposed activity and also for future expansions. The

proposed location should be well connected with all infrastructure facilities like,

transportation, power/electricity, water, communication, besides availability of

skilled/unskilled workforce. The Proposed unit will provide employment directly to

100persons and indirectly for 50 more persons. The Unit has to be established on leasehold

land or rented premises with a built-up area of approximately 400 Sq. Meters.

The Technology:

Corrugated Boxes are made in different sizes. The boxes are used for various purposes

including shipping, distribution and so forth. These boxes are ecofriendly due to which many

people and industries inclined to these boxes. Many years ego, box making industries were

using conventional machinery for different operations. At present, semi/fully automatic

Advanced Corrugated Box making technology is easily available in the market in all sizes up

to 100 inches. With this advanced technology machinery, 5 layer corrugated paper box

making is very easy and simple as worker enter the corrugated board feeding in to the unit,

the conveyor takes this board to creasing unit where the machine makes proper creases and

pieces. Then the machine puts glue on the board and then starts folding. At the time when

board reaches the ejector it is transformed in to several boxes.

Page | 17
The Process:

The boxes are made up of corrugated paperboard that is different from the rigid paper called

as cardboard. The boxes are used to hold things to protect it from damaging and keeping it

from leaking. Boxes are printed with important information on them about what is inside or

how to carry or move them. It is carefully designed to insert, hold items in place so they won’t

spill or be damaged. Steps in Box Building Corrugating machine is designed to do continuous

process which brings together three, five or seven sheets of paper to form single, double or

triple wall corrugated board. Strongboxes can be made from different layers like 3 layers or

5 layers of flutes. The first work is to mix dry corn starch with water and other chemicals and

push it into the corrugators to spread on the corrugated medium as the layers of liner are

added. A box can be made by the corrugated board on a sequence of connected machines

called a corrugating line.

1. Corrugation: The corrugators are fed with reels of paper. The paper is hardened with heat

and steam which is passed between corrugating rolls. This process gives the paper a flute

shape (wavy layer) in the single facer. The roll of paper is pulled between a pair of gear like

cylinders called corrugating rolls. This forms the paper into a series of particular waves. Glue

is applied to the tips of the flutes on one side at the right places and the flute tips are pressed

against a flat liner. This creates a corrugated board, i.e., a continuous sheet of flat paper with

fluted paper glued to it. The corrugated board is so stiff that it cannot be rolled up; this is cut

into flat sheets as per the required size to make the boxes which has been ordered. The

corrugated board are then arranged and set aside so the glue can dry properly and after that

it is sent to the next process.

Page | 18
2. Printing: A printing machine is used to print with bright colour ink. Use graphic designs

for self-supporting display feature like company name, logo, product information, etc.

3. Die-Cutting: Die cutting is used to cut or punch out the size and shape of corrugated paper

desired.

4. Stitching: Stitching is used to connect the lap and the end of the sheet of a corrugated

container with a metal wire.

5. Gluing: Gluing is like stitching but resign adhesive is sued instead of metal wire. Finally

the packed or bundled boxes are ready for dispatch.

Regular Slotted Container

Box Blank Showing Score Lines, Slots, and Manufacturer's Joint

Page | 19
The process flow chart for manufacturing corrugated paper board boxes is given below:

Process Flow Chart for manufacturing of Corrugated Paper Boxes

Raw Materials

Paper Roll Glue

Corrugation Machine

Corrugation Board

Slitter Machine

Flexo Print & Slotter Die Cutting

Manual Slotting

Gum Pasting &

Manual Print
Stitching

Banding & Finished Carton

Page | 20
Quality Assurance & Specifications

Quality assurance and quality check are the part and parcel of every sub stage of the process.

The quality control process starts with the supplier who supplies the Kraft paper which is

used to make corrugated cardboard. Kraft paper should be smooth and strong. The

individual boards are checked randomly after corrugation. The quality check measures the

moisture in the liner and medium. In the manufacturing process, quality test is determined

by ensuring the glue strength, bursting strength, compression and highly accurate

dimensions. The flatness of the box board is tested by warp test which assures that each

board will travel easily through the machines. The final product/boxes are also checked

randomly for each batch of the production for quality check, i.e. for trimming, cutting,

printing the colour and bundling.

In India, Corrugated Fibre board Boxes for packing and transportation are manufactured to

meet the standards as per IS 13228:2006, as tabulated below:

IS No. Title

1060 (Part 1): 1966 Methods of sampling and test for paper and allied products: Part 1

(revised)

2771 (Part 1): 1990 Corrugated fibre board boxes – Specification: Part 1 General

requirements (second-revision)

4006 (Part 1): 1985 Methods of test for paper and pulp based packaging materials: Part first

revision)

4006 (Part 2): 1985 Methods of test for paper and pulp based packaging materials: Part 2

(first revision)

Page | 21
 4261:2001 Glossary of terms relating to paper and pulp based packaging materials

(first revision)

6481:1971 Guide for principal uses and styles of fibre board containers

7028 (Part 6): 1987 Performance tests for complete, filled transport packages: “Part 6

Compression test (first revision)

7063 (Part 2): 1976 Method of test for corrugated fibre board: Part 2 Edgewise crush

resistance of board

7186:1973 Glossary of terms relating to paper and flexible packaging

The following ASTM standards are in practice among others:

 D1974 Standard Practice for Methods of Closing, Sealing and Reinforcing

Fiberboard Boxes

 D4727 Standard Specification for Corrugated and Solid Fiberboard Sheet Stock

(Container Grade) and Cut Shapes

 D5118 Standard Practice for Fabrication of Fiberboard Shipping Boxes

 D5168 Standard Practice for Fabrication and Closure of Triple-Wall Corrugated

Fiberboard Containers

 D5639 Standard Practice for Selection of Corrugated Fiberboard Materials and

Box Construction Based on Performance Requirements

 D6804 Standard Guide for Hand Hole Design in Corrugated Boxes

Page | 22
Plant & Machinery:
To manufacture corrugated boxes of 5-Ply semi Auto Corrugated Box line 100 Meters per

minute with specification of maximum width1800mm, design speed 120m/min with

stacking size W1800 X L 3500 X H 100-170 mm, with cutting & slitting precession of ± 1mm.

The following are main machinery with their activity details.

1. Single Facer: The single facer machine runs at the line speed of 100m/min. Using

negative pressure type design helps the medium paper to press evenly and closer to the

surface of corrugating roll to have perfect forming and also get even gluing on the flute tip to

have perfect laminating of the single facer. Quick change rolls in 15 minutes, while replacing

the corrugated rolls, the whole complete set of additional rolls with cassette is delivered into

the machine by the carriage and matched with the hydraulic motor to be fixed on the base of

the machine by the hydraulic system. The corrugating rolls, pressure roll, and glue roll are

adopted with the high stability of the airbag control system, also with pneumatic control

buffer effect. Adopt glue width motorized dividing to match the paper width. Digital readout

for the gap between glue roll and doctor roll. The movable type glue unit is convenient to

clean and maintenance. Easy operation control system. Touchscreen with a colorful drawing

display operation state, easy and simple to handle. This machine is having Built-inpre-

conditioner with the proportional device for the medium moisture and temperature

adjustment.

Page | 23
2. Mill Role Stand: The structure is double rotary shafts with four arms, supports two

paper mill roll on both arms at the same time. Hydraulic control system for paper mill, roller

up–down, clamp–opening, centering or motorized clamp open and centering. Using

multipoint brake and automatic expansion springiness chucks, Reduce paper wastage was

effective width 1200 mm – 2800 mm. Maximum paper roll diameter: 1500 mm Maximum

Support Weight: 5T. Main axis: k 270 mm

3. Pre Heater: The diameter of preheated roller: 4600 mm, 4900 mm, 41100 mm. Electro

motion heating angle adjustment. Adjustable range is 360 degrees. The surface of all rollers

is well treated by grind and plated by hard chrome to ensure reel paper be heated averagely.

Adopt dishing seal or plat design. Simplex, Duplex, Triplex or quardplex preheater according

to requirement.

Page | 24
4. Over Bridge Conveyor: Effective working width: 1600 mm- 2500 mm, Max. Working

speed: 200 m/min 250 m/min, Max. Sheet length 3000 mm, min sheet length 500 mm., Max

Stacking height 1400 mm. (stacking height not over triplicity of sheet width), Automatic

sheet stacking and side delivery, simplex or duplex down stacker structure, Hydraulic Servo

valve control of elevator deck, ensure stable and quickly stacking, conveyor belt keeping

synchronous with production line speed, keep stacking stable. PLC Control system to follow

production line speed , delivery paper sheet, control elevator deck up and down, control back

stop positioning clapboard to achieve automatic order change. This machine can be connect

with production management system to achieved order change and order management.,

Adopt man – machine conversation and touch screen display, easy operation.

5. Glue Machine (Double): The glue machine Design Speed: 250 m/min, Glue roller:

320 mm. Each of the glue rolls controlled by a separate transducer motor to ensure all rolls

run with the same pace also run singly, because each roll controlled by the separate

transducer, after the glue roller renewed, also ensure the roll run with the same speed by

transducer adjustment.

Page | 25
6. Double Facer: The double facer is also like single with added advantages like 2 air-

cushion hot plate, 3 air-cushion hot plate ,4 air-cushion hot plates and Adjustable air bag

press plate, Spring press plate Gravity roller.

7. Main Driver:

Page | 26
8. Slitter and Scorer (Servo): Automatic Synchronize with the corrugated line and also

get in line with manufacture management system. High Compatibility, high quality PLC

equipped composing the CNC system. There are three type of scores: Concave – Convex

(Single Wall), Concave – Convex (Double Wall) and convex- Flat, which can also be alternated

with electrical scoring can also be computer controlled with fine scoring results. Thin

tungsten steel alloy blade, Sharp and long life of over 8 million meters. Computer controlled

auto grinding and manual grinding also applicable. Alternative grinding the blade when

slitting the board. It can increase efficiency.

9. Single Helical Cut off: Design Speed: 200 m/min – 250 m/min, Effective width: 1400

MM – 2500 MM, Cutting Length: 500 mm- 9000 mm, cutting precision: +/- 1 mm (Running

at a steady speed). Helical Knives Structure with HSS knife edge, serration type knife and

scissor cutting with less shear force, to keep the knives long life. Print and behind feeding

adopt sun wheel, smooth transportation, and uniform pressure, avoid damage paperboard.

Adjustable high precision non- gap gear to ensure cutting precision and running balance.

Knife shaft made by quality forged steel material.

Page | 27
10. Down Stacker: Gantry stacking. Changing single time is 20 seconds, automatic

counting system synchronized with the production management system, change orders

automatically with high speed. During working with production manage control system, and

then wastes paperboard less than 700mm due to change order. AC servo control movement

allows stacking smoothly and tidily.

Page | 28
Schedule of Implementation:

S. No. Activity Start Finish

1 Occupation of land and building May 2021 May 2021

(Lease hold rental)
2 Udayam Registration May 2021 May 2021

3 Plant and Machinery July 2021 Sept 2021

(a) Ordering
(b) Erecting
4 Approvals, registrations, June 2021 Aug2021
licenses from statutory bodies
5 Commissioning Sept2021 Oct 2021

6 Bank Appraisals for Term loan Sept2021 Oct 21021

and working capital loan
7 Trial Production Nov 2021 Nov 2021

8 Commercial Production Dec 2021 Dec2021

Page | 29
Government Schemes:

(i) State Government Schemes:

1. Investment Subsidy Scheme: The unit eligible to avail Telangana State Government

Investment subsidy scheme i.e. 15% subsidy on fixed capital up to Rs.20lakhs to the general

category and 35% on fixed capital maximum up to Rs.75 lakh to the special category like SC,

ST.

2.Power Cost Reimbursement: Fixed power cost reimbursement @ Rs.1.00 per unit for 5

years from the date of commencement of commercial production.

3. Interest Subsidy: Interest subsidy under Pavala Vaddi (25 paise interest) Scheme on the

term loan taken on the fixed capital investment by New Micro and Small Enterprises in

excess of 3% per annum subject to a maximum reimbursement of 9% per annum for a period

of 5 years from the date of commercial production.

4. Stamp Duty Exemption: 100% reimbursement of Stamp Duty and transfer duty paid by

Industry for Industrial use, 100% reimbursement of Stamp duty for lease of Land/Building.

5. Reimbursement of 100% net VAT/CST or State Goods and Services Tax (SGST):

Reimbursement of 100% net VAT/CST or State Goods and Services Tax (SGST) for a period

of 5yearsfromthedateofcommencementofcommercialproduction.

(ii) Government of India Schemes:

1. CGTMSEs: The unit eligible to avail credit facility under CGTMSEs. The Credit Guarantee

Scheme for Micro and Small Enterprises (CGS) was launched by the Government of India

(GoI) to make available collateral-free credit to the micro and small enterprise sector. Both

the existing and the new enterprises are eligible to be covered under the scheme. The credit

facilities which are eligible to be covered both term loans and/or working capital for

Page | 30
collateral free loan up to a limit of Rs.200 lakh is available for individual MSEs on payment

of guarantee fee to bank by the MSEs. Guarantee coverage ranges from 85% (Micro

Enterprise up to Rs.5 lakh) to 75% (others). 50% coverage is for Retail Activity.

2. CLCS-TUS Scheme:

GOI is providing financial support to MSEs to facilitate technology up gradation through

institutional finance for induction of well-established and proven technologies in the specific

sub-sector/products. All Micro and Small Enterprises (MSEs) availing institutional credit to

buy new Plant & Machinery approved under the scheme.

Special Benefits- In case of SC/ST, Women, NER / Hill States / Aspirational Districts /LWE

affected Districts, the subsidy shall be admissible for investment in acquisition /replacement

of Plant & Machinery /equipment & Technology up-gradation of any kind (Core plant &

Machinery). Second hand & fabricated will not be eligible.

MSEs are eligible to get upfront subsidy of 15% on institutional credit upto Rs.100 Lakh (i.e.

subsidy cap of Rs.15.00 lakh) for identified sectors/ subsectors/ technologies.

3. Micro and Small Enterprises Cluster Development Programme (MSE-CDP):

Under the scheme, tangible “assets” as Common Facility Center (CFC) can be created with

facilities such as Common Production/Processing Centre (for

balancing/correcting/improving production line that cannot be undertaken by individual

units), Design Centres, Testing Facilities, Training Centre, R&D Centres, Effluent Treatment

Plant, Marketing Display/Selling Centre, Common Logistics Centre, Common Raw Material

Bank/Sales Depot, Plug & Play facility, facilities that can support marketing systems,

collective GI, development of common production & product standards, development of new

product designs, improved systems for better hygiene & working conditions for workers,

Page | 31
systems for higher overall productivity & capacity utilization of the cluster, systems for skill

upgradation of the cluster, as well as supporting diversification activities of enterprises and

startups in the cluster, etc. Backward/Forward linkages for value addition in bi-

product/waste of cluster units would also be admissible for enhancing

productivity/profitability of individual units subject to condition that CFC itself would not

sell/market products/biproducts directly.

The GoI grant will be restricted to 70% of the cost of Project of maximum Rs.20.00 crore. GoI

grant will be 90% for CFCs in NE & Hill States, Island territories, Aspirational Districts/LWE

affected Districts, Clusters with more than 50% (a) micro/ village or (b) women owned or

(c) SC/ST units. The cost of Project includes cost of Land (subject to maximum of 25% of

Project Cost), building, pre-operative expenses, preliminary expenses, machinery &

equipment, miscellaneous fixed assets, support infrastructure such as water supply,

electricity and margin money for working capital.

Page | 32
Financial Aspects:

A. Fixed Capital
(I) Land and building

S. No Rent per
Rent per annum
Description Qty month
(in Rs.)
(in Rs.)
1. Land and Building on monthly 500 Sq. 1,50,000 18,00,000
rental basis Mtrs

(II) Machinery and Equipment

S. No. Description of Machinery and Qty. (Nos.) Rate Value in Rs.

equipment (in Rs.)
I. Corrugated Card Board line
1 Vacuum Single Facer machine 1

2 Hydraulic shaft less Mill Role Stand 1

3 Pre Heater 1

4 Over Bridge Conveyor 1

5 Triple Pre Heater 1

6 Gluing Machine 1

7 Double Facer with driving part. 15000000 15000000

1
8 NC Helical Cutting Machine: 1
9 Online Slitter and Scorer (Electric and
Scorer Adjusting )
1
10 Corrugated Card Board Down Stacker
1
11 Glue Making system
1
12 Electric control Panel system
1
II. High Speed Lead Edge 3 Colour
Printer Slotter Die Cutter Stacker
1 7500000 7500000
Design.
speed of 150 Sheets/min

Page | 33
III. Electrically Operated Crane
Capacity: 5MT 800000 800000
1
IV Welding Machine:
30000 30000
1
V Tools, Jigs and Fixtures
20000 20000
LS
VI Material Handling Equipment 10000 10000
LS
VII Bench Grinding Machine 10000 10000
1
VIII Transformer 315 KVA 400000 400000
1
IX DG Set 150 KVA 500000 500000
1
X Weighing Machine of 2MT capacity 15000 15000
1
XI Fire Fighting Equipment 10000 10000
LS
XII Fright charges @2% 500000
XIII Taxes @5% 1215000
TOTAL 26010000
SAY
2,60,00,000

(III) Electrical Installation, Erection and Commissioning

S. No. Description Qty Rate Value in Rs.

1. Erection of civil works LS 10,00,000 1000000
2. Installation of machinery and electrification, 25,00,000
erection of transformer etc. (10% of LS 2500000
machinery)
Total 35,00,000

(IV) Other Fixed Assets

S. No. Description Qty Rate Value in Rs.

1. Working Tables and stools LS 100000 100000
2. Office furniture and other equipment LS 200000 200000
3. Computers and printers 15 50000 750000
Total 10,50,000

Page | 34
(V) Details of Other Deposits

S. No. Description Amount in Rs.

1. Telangana state Electricity Department 545000
2. Land and Building Lease agreement Security Deposit 1000000
3. Pollution Control No 5000
4. Factories and Fire services Licenses 5000
Total 1555000

(VI) Preliminary and Preoperative Expenses

S. No. Description Amount in Rs.

1. Travelling Expenses 20000
2. Cost of Project Preparation 40000
3. Documentation 40000
4. Salaries/ Expertise during Erection and Installation 500000
Total 600000

B. Economics of Working

1. Raw Materials and Consumables:

The Raw materials and consumables are used in manufacturing in corrugated boxes are Kraft

Paper, Glue, paints. All the Raw Materials and Consumables are locally available.

Units Value
S.No. Description of Raw Material Qty Rate
(Rs. in crore)
1. Kraft Paper MT 32000 35,000 112
2. Lamination Glue MT 780 32,000 2.946
3. Printing Ink Ltrs 33600 180 0.605
4. Staple pins Boxes 400 1500 0.06
5. Miscellaneous materials like binding LS 500 0.10
cloth, Adhesive Tape, Lubricants,
Engine oils, laminations, etc.
Total 115.711

Page | 35
2. Man Power / Employment details

The unit requires about 100 employees, consisting of both technical & non-technical and

skilled/unskilled workers and the details are given below. As the unit is proposed to be

located in Hyderabad (though report is suitable for any location), both skilled and unskilled

workers are available easily.

(A) Wages
No. of Salary/Month Total/annum
S.No. Designation
Persons (in Rs.) (in Rs.)
1. Skilled workers 12 15,000 2160000
2. Semi-Skilled workers 15 12,000 2160000
3. Un skilled workers 25 10,000 3000000
Perquisites @ 15% on the salaries 1098000
Total 84,18,000

(B) Salaries
No. of
Salary/Month Total/annum
S.No. Designation Persons
(in Rs.) (in Rs.)
1. Managers 4 50,000 2400000
2. Engineers 20 25,000 6000000
3. Supervisors 15 18,000 3240000
4. Clerk/Accountant 10 8000 960000
5. Watchman/Peon 5 6000 360000
Perquisites @ 15% on the salaries 1944000
Total 1,49,04,000
3. Utilities
(a) Electricity Load:

The unit is needs minimum electricity load of 250 KVA and connected load of 150 HP of High

Tension Electricity Connection (440 Volts) for which provisions to be made.

Total/annum
S.No. Description Units Rate
(in Rs.)
1. Power: 200KW x 24 hrs. x 50% utilization Rs.
720000 4320000
x 25days per Month x 12 Months 6.00/-
2. Water LS 180000
Total 45,00,000

Page | 36
4. Other Contingencies
Description Total/annum
S.No.
(in Rs.)
1. Rent 1800000
2. Stationery and Postage 50000
3. Transportation and conveyance 100000
4. Maintenance and Repair 300000
5. Insurance 250000
6. Advertisement and Publicity 50000
7. Service Taxes 200000
8. Miscellaneous 250000
Total 30,00,000

5. Working Capital Estimates

Amount
S.No. Description Stocking Period
(Rs. in crore)
1. Raw Material One month 9.64
2. Work in Progress One Week 1.94
3. Finished Goods One Week 1.98
4. Bills Receivable 15 Days 6.25
Total 19.81

C. Means of Finance

S. No. Description Details

1. Promoter’s Contribution 25.36
2. Debt equity Ratio 3:1

D. Source of Finance
(Rs. in crore)
Promoters
S. No. Description Total Bank
Contribution
1 Land and Building Lease Agreement 0.10 0.01 0.09
2. Plant and Machinery and Equipment
2.95 2.21 0.74
and Deposits
3. Other Fixed Assets 0.105 0.080 0.25
4. Preliminary and preoperative Expenses 0.06 0.04 0.02
5. Working Capital one Cycle 19.81 14.86 4.95
Total 22.855 17.20 5.835

Page | 37
E. Basis and Presumptions:

1. Installed capacity is estimated at 60000MT per annum

2. The units presumed to work three shifts per day and 300 days in a year.
3. Unit is expected to achieve the capacity utilization as per bellow:

1styear - 50%
2ndyear - 60%
3rdyear - 70%
4th year onwards - 75%

4. Labor Wages and salaries have been worked out as per the prevailing market rates.
5. Commercial production is expected to commence from December 2021 onwards.
6. From 2nd year onwards, wages and salaries have been increased by 10% every year.
7. Depreciation is worked out at 10% on machinery,20% on furniture, jigs & fixtures,
work tables and stools, computers and printers.
8. Cost of raw materials is worked out at prevailing market rates.
9. Wastage calculated at 1to 1.5 %.
10. Interest is calculated at 14% for term loan as well as working capital.
11. Taxes on plant &machinery calculated @5%.
12. Freight charges of machinery calculated @2%
13. Rental charges for establishing the proposed unit at Hyderabad is calculated as per the
prevailing market rates in Hyderabad.
14. Machinery costs are taken as per the lowest quotations provided by M/s. Nexgen Global
Machine Tools, #41, Lake View Street, Adambakkam, Chennai-600088 and M/s Natraj
Corrugating Machinery Co., Plot No 21-23, Mithrl, Dist. Palwal, Haryana121105.
(Annexure-V)
15. Raw Material costs are taken as per the prevailing market rates.
16. Selling price calculated at Rs.41,000/MT.
17. Income tax calculated at 25%.

Page | 38
Financial Analysis

Estimated Cost of Production and Profitability Rs. in crore

Year 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29

A Installed Capacity 6000MT 6000MT 6000MT 6000MT 6000MT 6000MT 6000MT 6000MT
B Production
C Capacity of Utilization 50 50 60 70 75 75 75 75
D Manufacturing Expenses
i Raw Material and Consumables 38.57 115.711 135.85 158.492 173.57 173.57 173.57 173.57
ii Utilities 0.15 0.45 0.54 0.630 0.675 0.675 0.675 0.675
iii Wages (Direct) 0.281 0.842 0.926 1.020 1.122 1.234 1.357 1.493
iv Repair and Maintenance 0.01 0.03 0.036 0.042 0.045 0.045 0.045 0.045
SUB TOTAL (D) 39.011 117.033 137.352 160.184 175.412 175.524 175.647 175.783
E Administrative Expenses
i Salaries 0.497 1.49 1.64 1.804 1.984 2.14 2.354 2.589
ii Other administrative Expenses 0.090 0.27 0.324 0.378 0.405 0.405 0.405 0.405
SUB TOTAL(E) 0.587 1.76 1.85 2.182 2.389 2.545 2.759 2.994
F Selling Expenses 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
G Total cost of Production 39.598 118.79 141.170 162.366 177.801 178.069 178.406 178.777
H Sales 41.00 123.00 147.60 172.20 184.50 184.50 184.50 184.50
I Gross Profit before Income Tax and
1.402 4.21 6.43 9.834 6.699 6.431 6.094 5.723
Depreciation
J Interest on Term Loan 0.102 0.309 0.28 0.21 0.14 0.07 0.00 0.00
K Interest on working capital loan 0.500 2.109 2.29 2.50 2.60 2.60 2.60 2.60
L Depreciation 0.00 0.30 0.267 0.239 0.213 0.190 0.171 0.154
M Operating Profit (I-J-K -L) 0.80 1.502 3.593 6.885 3.746 3.59 3.323 2.969
N Provision for Taxation 0.20 0.375 0.90 1.72 0.936 0.89 0.83 0.641
O Net Profit after Tax 0.60 1.127 2.693 5.165 2.81 2.70 2.493 2.328
P Net profit before Tax interested
back but after depreciation EBIT(I- 0.80 1.202 3.326 6.646 3.533 3.40 3.152 2.815
L)

Page | 39
Cash Flow Statement
(Rs. in crore)
S. No. Years Costs Period Start 1st 2nd 3rd 4th 5th 6th 7th 8th Total
1 Sources of Funds
A Net profit before taxes with
interest added back but after 0.80 1.202 3.326 6.646 3.533 3.40 3.152 2.815 24.874
Depreciation
B Increase in share capital
0.855 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.74
equity
C Depreciation 0.00 0.30 0.267 0.239 0.213 0.190 0.171 0.154 1.534
D Increase in Long Term Loans 2.34 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.21
E Increase in Share capital of
4.95 0.00 0.50 0.50 0.25 0.00 0.00 0.00 7.681
W.L
F Increase in Bank Borrowings
14.86 0.00 1.481 1.481 0.74 0.00 0.00 0.00 23.025
for W.L
TOTAL-1 3.195 20.61 1.502 5.574 8.866 4.736 3.59 3.323 2.969 60.064
2 Disposition of funds
A Preliminary Expenses 0.06 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.06
B Increase in Capital
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Expenditure
C Increase in Working Capital 19.81 0.00 1.981 1.981 0.99 0.00 0.00 0.00 24.762
D Decrease in Term loan 3.135 0.00 0.21 0.50 0.50 0.50 0.50 0.00 0.00 3.135
TOTAL-2 3.195 19.81 0.21 2.481 2.481 1.49 0.50 0.00 0.00 30.167
3 Opening Balance 0.00 0.80 2.092 5.185 11.57 14.816 17.906 21.229
4 Net Surplus(1-2) 0.80 1.292 3.093 6.385 3.246 3.09 3.323 2.969
5 Closing Balance 0.80 2.092 5.185 11.57 14.816 17.906 21.229 24.198

Page | 40
DSCR Statement
Rs. in crore
CA Particular 1st 2nd 3rd 4th 5th 6th 7th 8th
Cover
A Net profit after Tax 0.60 1.127 2.693 5.165 2.81 2.70 2.493 2.328
B Depreciation 0.00 0.30 0.267 0.239 0.213 0.190 0.171 0.154
C Interest on long term
0.102 0.309 0.28 0.21 0.14 0.07 0.00 0.00
loan
d Interest on working
0.500 2.109 2.29 2.50 2.60 2.60 2.60 2.60
capital
Total Cover 1.202 3.845 5.53 8.114 5.763 5.56 5.264 5.082
Service
A Repayment of Long
0.00 0.21 0.50 0.50 0.50 0.64 0.00 0.00
Term loans
B Interest on Long Term
0.102 0.309 0.28 0.21 0.14 0.07 0.00 0.00
loan
c Interest on working
0.500 2.109 2.29 2.50 2.60 2.60 2.60 2.60
capital
Total Service 0.602 2.628 3.07 3.21 3.24 3.31 2.6 2.60
DSCR 1.99 1.46 1.80 2.52 1.77 1.68 2.02 1.95

DSCR: 1.90

Page | 41
Projected Balance Sheet

S. No. Particular Const. 1st 2nd 3rd 4th 5th 6th 7th 8th
Period
A Liabilities
Share Capital 5.75 5.75 5.75 5.75 5.75 5.750 5.75 5.75 5.75
Depreciation 0.00 0.30 0.267 0.239 0.213 0.190 0.171 0.154
Reserves& Surplus 0.00 0.00 0.000 0.000 0.000 0.000 0.00 0.00
Profits /loss 0.60 1.127 2.693 5.165 2.810 2.70 2.493 2.328
Term loans 2.35 2.35 2.140 1.640 1.14 0.640 0.140 0.00 0.00
Current liabilities 0.00 0.000 0.000 0.000 0.000 0.000 0.00 0.00
Bank borrowings for
0.00 14.86 14.86 16.341 17.822 18.562 18.562 18.562 18.562
W.C.
Total 8.10 23.56 24.177 26.691 30.116 27.975 27.342 26.976 26.794
B Assets
Gross Block (Assets) 3.155 3.215 3.215 3.215 3.215 3.215 3.215 3.215 3.215
Less: Depreciation 0.00 0.30 0.567 0.806 1.019 1.209 1.38 1.534
Net Block(assets) 3.155 3.215 2.915 2.648 2.409 2.196 2.006 1.835 1.681
P&P Exp. & Deposits 0.06
Current Assets Gross 19.81 19.81 21.791 23.772 24.762 24.762 24.762 24.762
Cash & Bank Bal. 4.885 0.535 1.452 2.252 3.935 1.017 0.574 0.379 0.351
Total 8.10 23.56 24.177 26.691 30.116 27.975 27.342 26.976 26.794
Current Ratio 1.33 1.431 1.471 1.55 1.39 1.364 1.354 1.353

Current Ratio= Current Assets/Current liabilities=1.41

Page | 42
Return on Investment (RoI)

RoI: Gross Profit x 100

Total Investment

= 6.699 x 100 =29.12%

23

Break Even Point (B.E.P)

Variable Costs (Rs. in crore)

Raw Materials 173.57

Power fuel 0..675
Wages 1.122
Interest on Bank Borrowings 2.74
Repair and Maintenance 0.045
Total Variable Costs 178.152
Fixed Costs
Managerial remuneration 1.984
Int. Term Loan 0.14
Depreciation 0.213
Other administrative expenses 0.405
Total Fixed Costs 2.742

Contribution =Sales – variable cost=184.50-178.152 =6.348

Contribution = 6.348

Breakeven: Fixed cost X 100 = 2.742= 43.19%

Contribution 6.348

Page | 43
Conclusions:

As per the above study report and Project salient features, the proposed activity seems to be

technically feasible and economically viable for setting up of Corrugated Paper Board and

Boxes manufacturing units by prospective entrepreneurs. Establishment of more and more

manufacturing units by the prospective entrepreneurs and technological upgradation of the

existing units, coupled with the benefits out of the Government schemes would enhance the

manufacturing potential of the domestic corrugated box producers leads to reduction of

imports, increase in exports and also generate employment opportunities.

******

Page | 44