BABA INDUSTRIES

PROJECT REPORT

ON

MANUFACTURE OF PET BOTTLES

Office& Location:
SY.NO37,
Kummaripalem K V Bhoomulu Village,
Bheemunipatnam Mandal,
Visakhapatnam
BABA INDUSTRIES

INDEX:

1. Project at a glance
2. Introduction
3. Scope of the Project
4. Constitution / Sector
5. Background of the Promoter
6. Product details
7. Process
8. Raw materials
9. Marketing
10. Location Advantages
11. Incentives
12. Subsidies
13. Licenses
14. Project Cost & Means of Finance
15. Notes on Project Cost
16. Notes on Means of Finance
17. Utilities
18. SWOT Analysis
19. Assumptions
20. Financial Statements

1.PROJECT AT A GLANCE
1. Name of the Unit : BABA INDUSTRIES

2. Location . : Sy No 37, Kummaripalem K V Bhoomulu,

Bheemunipatnam Mandal,
Visakhapatnam Dist

3 Line of Activity : Manufacture of Pet Bottles

4. Sector : Small
BABA INDUSTRIES
5. Constitution : PROPRIETRIX

6. Name of the Promoters : Smt. MADHAVI NEELAMSETTY

8. Project Cost & Means of Finance:

(Rs. in Lakhs)
PROJECT COST AMOUNT MEANS OF AMOUNT
FINANCE
Land OWN Capital 12.75
Buildings 10.00
Machinery 25.00 Term loan 24.75
Working Capital 10.00 Working Capital loan 7.50
Total 45.00 Total 45.00

8. Promoters Contribution. : 28.33 %

9. Power. : 20 HP

10. Employment. : 15

11. DSCR :

12. BEP :

13. Debt / Equity :

2.INTRODUCTION

Polyethylene terephthalate
.
Polyethylene terephthalate (sometimes written poly(ethylene terephthalate)), commonly
abbreviated PET, PETE, or the obsolete PETP or PET-P is a thermoplastic polymer resin of
the polyester family and is used in synthetic; beverage, food and other liquid containers;
thermoforming applications; and engineering resins often in combination with glass fiber.
It may also be referred to by the brand name Dacron; in Britain, Terylene or, in Russia and
former Soviet Union, Lavsan.
The majority of the world's PET production is for synthetic fibers (in excess of 60%), with bottle
production accounting for about 30% of global demand. In the context of textile applications, PET
is referred to by its common name, polyester, whereas the acronym PET is generally used in
BABA INDUSTRIES
relation to packaging. Polyester makes up about 18% of world polymer production and is the
third-most-produced polymer; polyethylene (PE) andpolypropylene (PP) are first and second,
respectively.
PET consists of polymerized units of the monomer ethylene terephthalate, with repeating
C10H8O4 units. PET is commonly recycled, and has the number 1 as its recycling symbol.
Depending on its processing and thermal history, polyethylene terephthalate may exist both as
an amorphous (transparent) and as a semi-crystalline polymer. The semicrystalline material
might appear transparent (particle size < 500 nm) or opaque and white (particle size up to a few
microns) depending on its crystal structure and particle size. Its monomer (bis--
hydroxyterephthalate) can be synthesized by the esterification reaction betweenterephthalic
acid and ethylene glycol with water as a byproduct, or by transesterification reaction
between ethylene glycol and dimethyl terephthalate with methanol as a byproduct.
Polymerization is through apolycondensation reaction of the monomers (done immediately after
esterification/transesterification) with water as the byproduct.

Uses
Because PET is an excellent water and moisture barrier material, plastic bottles made from PET
are widely used for soft drinks (see carbonation). For certain specialty bottles, such as those
designated for beer containment, PET sandwiches an additional polyvinyl alcohol (PVOH) layer
to further reduce its oxygen permeability.
Biaxially oriented PET film (often known by one of its trade names, "Mylar") can
be aluminized by evaporating a thin film of metal onto it to reduce its permeability, and to make it
reflective and opaque (MPET). These properties are useful in many applications, including
flexible food packaging and thermal insulation such as "space blankets". Because of its high
mechanical strength, PET film is often used in tape applications, such as the carrier for magnetic
tape or backing for pressure-sensitive adhesive tapes. It is used to make the fabric polar fleece.
Non-oriented PET sheet can be thermoformed to make packaging trays and blisters. If
crystallizable PET is used, the trays can be used for frozen dinners, since they withstand both
freezing and oven baking temperatures. As opposed to amorphous PET, which is transparent,
crystallizable PET or CPET tends to be black in colour.
When filled with glass particles or fibres, it becomes significantly stiffer and more durable.
PET is also used as substrate in thin film and solar cell.

History
PET was patented in 1941 by John Rex Whinfield, James Tennant Dickson and their employer
the Calico Printers' Association of Manchester, England. E. I. DuPont de Nemours in Delaware,
USA, first used the trademark Mylar in June 1951 and received registration of it in 1952. [5] It is
still the most well-known name used for polyester film. The current owner of the trademark is
DuPont Teijin Films US, a partnership with a Japanese company. [6]
In the Soviet Union, PET was first manufactured in the laboratories of the Institute of High-
Molecular Compounds of the USSR Academy of Sciences in 1949, and its name "Lavsan" is an
acronym thereof (
) .
The PET bottle was patented in 1973 by Nathaniel Wyeth.

Physical properties
Sailcloth is typically made from PET fibers also known as polyester or under the brand name Dacron; colorful
lightweight spinnakers are usually made of nylon.
BABA INDUSTRIES
PET in its natural state is a colorless, semi-crystalline resin. Based on how it is processed, PET
can be semi-rigid to rigid, and it is very lightweight. It makes a good gas and fair moisture barrier,
as well as a good barrier toalcohol (requires additional "barrier" treatment) and solvents. It is
strong and impact-resistant. PET becomes white when exposed to chloroform and also certain
other chemicals such as toluene.
About 60% crystallization is the upper limit for commercial products, with the exception of
polyester fibers. Clear products can be produced by rapidly cooling molten polymer below
Tg glass transition temperature to form anamorphous solid. Like glass, amorphous PET forms
when its molecules are not given enough time to arrange themselves in an orderly, crystalline
fashion as the melt is cooled. At room temperature the molecules are frozen in place, but, if
enough heat energy is put back into them by heating above T g, they begin to move again,
allowing crystals to nucleate and grow. This procedure is known as solid-state crystallization.
When allowed to cool slowly, the molten polymer forms a more crystalline material. This material
has spherulites containing many small crystallites when crystallized from an amorphous solid,
rather than forming one large single crystal. Light tends to scatter as it crosses the boundaries
between crystallites and the amorphous regions between them. This scattering means that
crystalline PET is opaque and white in most cases. Fiber drawing is among the few industrial
processes that produce a nearly single-crystal product.
Intrinsic viscosity

A PET soft drink bottle

One of the most important characteristics of PET is referred to as intrinsic viscosity.
The intrinsic viscosity of the material, found by extrapolating to zero concentration of relative
viscosity to concentration which is measured in deciliters per gram (d/g). Intrinsic viscosity is
dependent upon the length of its polymer chains but has no units due to being extrapolated to
zero concentration. The longer the polymer chains the more entanglements between chains and
therefore the higher the viscosity. The average chain length of a particular batch of resin can be
controlled during polycondensation.
The intrinsic viscosity range of PET:
Fiber grade
0.40 0.70 Textile
0.72 0.98 Technical, tire cord
Film grade
0.60 0.70 BoPET (biaxially oriented PET film)
0.70 1.00 Sheet grade for thermoforming
Bottle grade
0.70 0.78 Water bottles (flat)
0.78 0.85 Carbonated soft drink grade
Monofilament, engineering plastic
BABA INDUSTRIES
1.00 2.00

3.PRODUCT

PET Bottles are used to packing of Edible oils, jams and sauces, Butter,
syrups,
Drinking water etc having the capacity from 500ml to 2 liters. PET resin
are
extruded and converted to pre-forms and later molding is done to make
the PET
Bottles by using the pre-forms. Major application areas of PET bottles
are carbonated soft drinks, Mineral water packing, Syrups, Edible oil
packing, Butter and Mayonnaise, Wine, Liquor and spirit packing, Sauce,
jam and squashes packaging, Agro chemical packaging and house hold
containers

4.SCOPE OF THE PROJECT

The envisaged project is to setup at Sy No 37,

Kummaripalem K V Bhoomulu Village,
Bheemunipatnam Mandal, Visakhapatnam Dist for
Manufacture of Pet Bottles. The promoter have
acquired the land on Own. The total project out
lay is Rs.35.00 lacs. The installed capacity of the
proposed firm is 12,00,000 Nos per annum in one
BABA INDUSTRIES
shift operations in 300 working days and he
operating capacity is assumed at 60%, 70%, & 80%
in 1st, 2nd & 3rd year onwards.

M/S BABA INDUSTRIES is in process of setting up

a small-scale unit for manufacturing of Pet
Bottles, Performs & Filling. The unit is proposed to
be located at Sy No 37, Kummaripalem K V
Bhoomulu Village, Bheemunipatnam Mandal,
Visakhapatnam Dist on own land

5.CONSTITUTION& SECTOR

Constitution

M/s BABA INDUSTRIES , unit is constituted as a

proprietary concern for manufacture of Bottles
Sector :
BABA INDUSTRIES
The proposed sector comes under Small Scale Sector. The
promoter has already obtained registration Certificate from
District Industries Centre, Visakhapatnam

6. BACKGROUND OF THE PROMOTER

1 Smt. Madhavi Neelamsetty , W/o Kataji Rao aged about 40

years is residing at Door No: 30-12-10, Dabagardens,
Visakhapatnam 530 020, she is the Sole Propretrix of the
proposed firm. She has sufficient experience in this line of
activity .

7.LOCATION AND ITS ADVANTAGES

LAND: The proposed location of the Unit is situated at S y N o 3 7 ,

Kummaripalem K V Bhoomulu Village,
Bheemunipatnam Mandal, Visakhapatnam Dist
and the administrative office at S y N o 3 7 , K u m m a r i p a l e m K
V Bhoomulu Village, Bheemunipatnam Mandal,
Visakhapatnam D i s t . The location of the industry has
BABA INDUSTRIES

considerable influence on the techno-economical facility of the project.

There are various factors contributing to the functioning of an industry
and following are the primary factors taken into consideration.

REASONS FOR THE SELECTION OF THE SITE:

1. Availability of labor at economically rate.

2. Adequate supply of electricity power.
3. Adequate supply of water throughout the year.
4. The site is well connected with road facility.
5. Banking facilities and Government supports.
6. Adequate Transport facilities for economical transportation of
finished product and Spare parts.
7. Nearness to the Market.
8. As the area is developed area, the setting up of a unit in this will
help the people to progress both socially and economically.

8.Incentives / Subsidies
The following incentives are available for Micro and Small Enterprises
(MSEs):
1. 100% reimbursement of Stamp duty and transfer duty paid by the industry on
purchase of land meant for industrial use.
2. 100% reimbursement of Stamp duty for Lease of Land/Shed/Buildings and
also mortgages and hypothecations.
3. 25% rebate in land cost limited to Rs. 10.00 Lakhs in Industrial Estates/
Industrial Parks.
4. 25% Land conversion charges for industrial use limited to Rs. 10.00 lakhs.
BABA INDUSTRIES
5. Fixed power cost reimbursement @ Rs.0.75 per unit (upper ceiling) on the
proposed revised rate (2010 -11) for 5 years from the date of commencement
of commercial production. Incase decrease in Power Tariff; the
reimbursement will be reduced proportionately.
6. 15% investment subsidy on fixed capital investment subject to a maximum of
Rs. 20.00 Lakhs.
7. Reimbursement of 100% VAT/CST or State Goods and Services Tax (SGST)
for a period of 5 years from the date of commencement of commercial
production to Micro Enterprises.
8. Reimbursement of 50% VAT/CST or State Goods and Services Tax (SGST) for
a period of 5 years from the date of commencement of commercial production
to Small Enterprises.
9. Interest subsidy under PavalaVaddi 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 5 years from the date of commencement of commercial production.
10. Seed capital assistance to First Generation entrepreneurs to set-up Micro
Enterprises @ 10% of the Machinery cost , which will be deducted from the
eligible investment subsidy
11. 50% reimbursement of cost involved in skill up gradation and training the
local man power limited to Rs.2000 per person.
12. 50% subsidy on the expenses incurred for quality certification / patent
registration limited to Rs. 2.00 Lakhs for MSEs
13. 25% subsidy on specific cleaner production measures limited to Rs. 5.00 lakhs.
14. To extend investment subsidy to the identified service activities related to
industries setup in all Municipal Corporation limits in the state as per the list
appended as Annexure-II

9.Licenses
The following licenses will be required for the Starting up the Industry:
1. Part I
2. Single Window approvals
3. Panchayati
4. Inspector of Factories
5. Pollution
6. Electricity
7. VAT
8. Town & City Planning
BABA INDUSTRIES

10. MARKET POTENTIAL

Pet bottles are replacing glass bottles because of the high rate of
breakage and the inconvenience of returning the empty bottle
after consumption.
The consumption pattern is tending to converge with the
international patterns and this is how new categories such as
sports drinks, juices and non-returnable (PET bottles and cans)
are catching up in the local market

11. RAW MATERIALS

The raw material used in manufacturing of PET Bottles/
Preforms is
BABA INDUSTRIES
Polyethylene Teraphthalate. Polyethylene tetra phthalate is a
polymer that is formed by combining two monomers called
modified ethylene glycol and purified teraphthalic acid
The basic raw material for the activity is Pet granule

INDIAN STANDARD SPECIFICATIONS

The Bureau of Indian standards, which is the national body

to frame Indian standards has laid down the following standards
relating of food grade PET after the above data and test reports
was submitted to the committee:-

IS : 12252 Specification for PET and PBT for their safe use in
contact with food stuffs, pharmaceuticals and drinking water.

IS : 12229 Positive list of constituents of PET and PBT for their

safe use in contact with food stuff, pharmaceuticals and drinking
water.

The prevention of Food Adulteration (PRA) Act has covered

PET along with other 8 thermoplastic materials for use in food
packaging providing these conform to the relevant Indian
Standards. IS: 12229:1986 is based on German Food Law BGA
Empfelung XVII. It is being aligned with EFC directive relating to
plastics materials, articles intended to come into contact with
food stuffs (EEC/90/128/upgrated). IS: 12252-1986 is being
revised in cooperating the EEC directive No.80/590 relating to
the symbol that should accompany materials and articles
intended to come into contact with food stuffs.
12.MANUFACTURING PROCESS

The manufacture of plastic bottles takes place in stages.

Typically, the plastic bottles used to hold potable water and other
drinks are made from polyethylene terephthalate (PET), because
the material is both strong and light. To understand the
manufacturing process its helpful to first examine the
composition of PET and how this affects plastic bottles.

PET is a thermoplastic polymer that can be either opaque or

BABA INDUSTRIES
transparent, depending on the exact material composition. As
with most plastics, PET is produced from petroleum
hydrocarbons, through a reaction between ethylene glycol and
terephthalic acid. To produce plastic bottles, the PET is first
polymerized to create long molecular chains.

Polymerization itself can be a complicated process, and accounts

for many of the inconsistencies between one batch of
manufactured PET and another. Typically, two kinds of
impurities are produced during polymerization: diethylene glycol
and acetaldehyde. Although diethylene glycol is generally not
produced in high-enough amounts to affect PET, acetaldehyde
can not only be produced during polymerization, but also during
the bottle manufacturing process. A large amount of
acetaldehyde in PET used for bottle manufacturing can give the
beverage inside an odd taste.

Once the plastic itself has been manufactured, the bottle

manufacturing process can begin. To ensure that the PET is
appropriate for use, numerous tests are done post-
manufacturing to check that the bottles are impermeable by
carbon dioxide (which is important for bottles that carry soda).
Other factors, such as transparency, gloss, shatter resistance,
thickness and pressure resistance, are also carefully monitored.

Bottle manufacturing
The first stage in bottle manufacturing is stretch blow molding.
The PET is heated and placed in a mold, where it assumes the
shape of a long, thin tube. (The process by which the plastic is
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forced into the mold is called injection molding.)The tube of PET,
now called a parison, is then transferred into a second, bottle-
shaped mold. A thin steel rod, called a mandrel, is slid inside the
parison where it fills the parison with highly pressurized air,
and stretch blow molding begins: as a result of the pressurized
air, heat and pressure, the parison is blown and stretched into
the mold, assuming a bottle shape. To ensure that the bottom of
the bottle retains a consistently flat shape, a separate component
of plastic is simultaneously joined to the bottle during blow
molding.

The mold must be cooled relatively quickly, so that that the newly
formed component is set properly. There are several cooling
methods, both direct and indirect, that can effectively cool the
mold and the plastic. Water can be coursed through pipes
surrounding the mold, which indirectly cools the mold and
plastic. Direct methods include using pressurized air or carbon
dioxide directly on the mold and plastic.

Once the bottle (or, in continuous manufacturing, bottles) has

cooled and set, it is ready to be removed from the mold. If a
continuous molding process has been used, the bottles will need
to be separated by trimming the plastic in between them. If a
non-continuous process has been used, sometimes excess plastic
can seep through the mold during manufacturing and will
require trimming. After removing the bottle from the mold and
removing excess plastic, the bottles are ready for transportation.
BABA INDUSTRIES

13. PROCESS FLOW CHART

BLOW MOULDING PROCESS

Preform is preheated

Open the mould and insert the

preform

Blowing of air into preform

Allow the bottle to cool for

solidification as desired shape

Open the mould and eject the

component
BABA INDUSTRIES

14.MACHINE SPECIFICATION

MACHINERY&
EQUIPMENTREQUIREMENT&ESTIMATEDCOST

S No Description Unit Amount

15.PROJECT COST & MEANS OF FINANCE

(Rs. in Lakhs)
PROJECT COST AMOUNT MEANS OF AMOUNT
FINANCE
Land OWN Capital 12.75
Buildings 10.00
Machinery 25.00 Term loan 24.75
Working Capital 10.00 Working Capital loan 7.50
Total 45.00 Total 45.00

Promoter Contribution : 28.33%

Debt Equity Ratio :

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16.NOTES ON PROJECT COST

Land &Buildings:

The promoter having her own land S y N o 3 7 , K u m m a r i p a l e m K

V Bhoomulu Village, Bheemunipatnam Mandal,
V i s a k h a p a t n a m D i s t . The proposed unit is setup there itself. The
proprietor has built up the building with Rs 10.00 Lacs . The location is
quite suitable for setting up the unit.

Plant &Machinery:-

The machinery and equipment worth of Rs.25.00 lacs are required to run
the unit. The promoter has already approached reputed suppliers,
obtained quotations and enclosed the same for your reference. Required
quotations are placed as annexure

Working Capital :-

An amount of Rs 10.00.lacs provided towards 25.72% of promoters margin

to obtain working capital facility from financial institution to run the unit in
smooth levels. The detailed working requirement placed as annexure
BABA INDUSTRIES

17.NOTES ON MEANS OF FINANCE

1. CAPITAL :

The promoters capital was fixed at Rs. 12.75 Lac. The unit entitled to
receive 28.33% of the project cost of Rs.45.00 lacs as Margin Money.

2. TERM LOAN :

The unit desires to avail a Term Loan of Rs 24.75 Lacs from

Bank/Financial Institute to meet part cost of the project cost, which
works out to 55% of the total project cost of Rs.45.00 lacs. The amount
would be repayable in 28 quarterly installments of Rs 0.88 lacs each with
a moratorium of twelve months from the date of commencement of
Commercial Production. However, the interest on the term loan would
be payable as and when it is applied on the account. The detail of the
repayment programmed is placed in this report.
BABA INDUSTRIES

18.UTILITIES AND SERVICES

POWER:
The Unit requires 20 HP power supply under L.T. Limit. No problems
are anticipated with regard to obtaining of power supply.

WATER:
The unit requires 1, 000 Liters of water per day.

EFFLUENTS:
There are no harmful effluents generated in the process. The unit has
to obtain clearance from Pollution Control Board.

TRANSPORTATION:
The proposed unit is located S y N o 3 7 , K u m m a r i p a l e m K
V Bhoomulu Village, Bheemunipatnam Mandal,
V i s a k h a p a t n a m D i s t . There is no problem for transportation of
raw material and finished goods.

MANPOWER REQUIREMENTS:
The unit will be employing 6 Nos. of workers besides 2 Nos. of
administrative staff. All the above persons can be recruited locally without
any difficulties.
BABA INDUSTRIES

19. SWOT ANALYSIS

STRENGTH:

The unit is located at S y N o 3 7 , K u m m a r i p a l e m K V

Bhoomulu Village, Bheemunipatnam Mandal,
Visakhapatnam D i s t . The unit is eligible for other Govt.
concessions. The promoters are having vast experience in the same line of
activity

WEAKNESS:

The unit has competition from the existing units as the proposed unit is
having latest technology and by the government encouragements to start
new industry the units can competent with the old industries.
BABA INDUSTRIES

ASSUMPTIONS FOR PROFITABILITY STATEMENT

Installed Capacity : 500 Bottles per hour
No. of Shifts : 1 Shift of 8 hours
No. of Working Days : 300 days.
500 x 8 Hours x 300 days= 12,00,000 Bottles.
OPERATING CAPACITY IS ASSUMED AS UNDER

Year 2015-16 2016-17 2017-18

Utilization 60% 70% 80%
Production (lacs)
2 Liters 1,20,000 1,40,000 1,60,000
1 Liters 1,20,000 1,40,000 1,60,000
500 ML 1,20,000 1,40,000 1,60,000
200 ML 1,20,000 1,40,000 1,60,000
100 ML 1,20,000 1,40,000 1,60,000
50 ML 1,20,000 1,40,000 1,60,000
----------- --------- -----------
TOTAL 7,20,000 8,40,000 9,60,000

RAW MATERIALS REQUIRMENT: (Taking 2 % Wastage) per annum(2015-16)

PRODUCTION QTY in lacs PER BOTTLE TOTAL WGT in TOTAL PRICE

(gms) tons lacs
2 LITRES 1,20,000 22.575 gms 5.43@80,000.00 4,33,440.00
1 LITRES 1,20,000 11.07 gms 2.658 2,12,640.00
500 ML 1,20,000 8.925 2.142 1,71,360.00
200 ML 1,20,000 7.14 1.7136 1,37,088.00
100 ML 1,20,000 6.375 1.53 1,22,400.00
50 ML 1,20,000 6.00 1.44 1,15,200.00
TOTAL 11,92,128.00
Stores and spares are estimated of Rs. 1,80,000/- per annum

Power charges are estimated as under Contracted load:

Energy charges: 20HPx 8x300x0.745x0.8x0.60x6.50= 2,78,392.80

Say 1.11 Lacs

BABA INDUSTRIES

Salaries & Wages are calculated as under

Production Manger = 1x12, 000 = Rs.12000

Skilled workers = 2x9, 000 = Rs.18000
Unskilled workers = 4x4, 500 = Rs.18000
Watchman = 1x3000 = Rs.3000
-------------
51, 000x12
= 6,12, 000/-
Repairs & Maintenance: -
Repairs and Maintenance are estimated of Rs.1,20, 000 /- P.A.
Other Manufacturing Expenses: -
Other Manufacturing Expenses are estimated of Rs.1,80, 000 per annum.
Administrative Expenses: - Administrative Expenses are estimated Rs 2, 60,000
per year.
SALES: (2015-16)

PRODUCTION QTY in lacs PER BOTTLE RS TOTAL LACS

2 LITRES 1,20,000 7.42 8,90,400.00
1 LITRES 1,20,000 5.22 6,26,400.00
500 ML 1,20,000 4.61 5,53,200.00
200 ML 1,20,000 3.43 4,11,600.00
100 ML 1,20,000 2.20 2,64,000.00
50 ML 1,20,000 0.87 1,04,400.00
TOTAL 28.50 LACS

Depreciation: - Depreciation was been calculated on written down value

method
Buildings = 10%
Plant & machinery 25%
Interest: - Interest has been calculated as per effective rate
Term Loan : 12.75%
Working Capital : 12.50 %