KRAFT PAPER BAGS
[CODE NO.4184]
Paper bags are the oldest types of packaging material and are very much prevalent in the modern days in various fields. In fact, paper bag is one of the most common and popular form of packaging. The handmade bags of paper have been a commodity of common use. However, for the manufacture of bags, the introduction of machines is of recent origin about the middle of 19th century. Since then the manufacture of paper bags has become an important industry in itself, paper bag is the cheapest form of packaging. Such paper bags have the specialty that they are light weight, free from any contaminants like dust and are, as well, free from shifting or 'puffing' which results in loss of contents. As for the share occupying these paper bags for general use require minimum possible space for storage and shipment, both before and after filling. However, one disadvantage of the paper bags is that they are not durable. Though the strength of the paper bags can be increased by lamination of the base paper with jute, scrim or other reinforcing materials, this however, increases the cost of the bag by making it more expensive.
Paper bags are made from a variety of papers both bleached and unbleached. However for making of the paper bags for general use, kraft paper and initiation kraft paper are the most common papers used. Papers most commonly used for commercial and office envelopes include manila, brown wrapping paper or white papers. The type of paper used for bags depends upon the requirements of the product to be packed. Kraft paper used for bag making is usually of 20 to 40 lbs basis weight.
Paper industry in India is the 15th largest paper industry in the world. It provides employment to nearly 1.5 million people and contributes Rs 25 billion to the government's kitty. The government regards the paper industry as one of the 35 high priority industries of the country Due to tough economic times; most major food stuff manufacturers are becoming particular how they package their products. A casual glance at the isles at the supermarket will tell you that most food is packaged in plastic or paper bags. For decades, plastic bags have competed toe-to-toe with paper bags, from the manufacturing plants to the retail supermarkets. In many countries now especially the United States, shoppers at local super markets and retail chains offer their customers the option to have their products bagged in plastic or paper. While many customers still value plastic because of its durability, water-resistant nature and also the fact that it is extremely reusable, paper bags are also wildly popular. One of the reasons why paper bags are popular is because of safety. Plastic bags have been responsible for many deaths especially for small children. This is because children are fond of playing with plastic bags and one of the ways in which they do this is to place the bags over their heads. In the event that the child is unable to free themselves fast enough, death by suffocation can occur. This is one major reason why shoppers prefer paper bags to plastic bags.
Another reason why shoppers prefer paper bags is because they are easily disposable. While plastic bags have obvious advantages, they tend to litter the house because most people reuse them. This can cause an environmental issue especially it there are wrong disposal. If disposed of wrongly especially in areas with farm animals, these animals can swallow these bags and suffer health repercussions. One major disposal issue that environmental proponents fight about in regards to plastic bags is the way recycling plants handle them. While recycling has been welcomed by many as a safe way of getting rid of plastics that have outlived their use, it has since been discovered that they are incinerated thereby releasing harmful toxins into the atmosphere.
Paper bags are light, safe and can be easily discarded after they are used. They therefore pose no threat to small children or to the environment. Although the chances of paper bags causing a fire exist, the chances are slim compared to dry grass during summer.
When children play with paper bags, they end up shredding them and therefore they pose no imminent threat. Paper bags are also extremely cost effective for the retailer and in most supermarkets; they are free with any purchase. This may not necessarily be the case with plastic bags where in countries such as Ireland, pose such an environmental hazard that an additional charge is passed on to shoppers who want to carry their grocery purchases using plastic bags.
“The manufacturing process for a paper bag requires four times as much energy as the manufacturing process for a plastic bag. The production of paper bags creates 50 times more water pollutants than the production of plastic bags and 70 percent more air pollutants.
Additionally, it requires 98 percent more energy to recycle paper bags than it does to recycle plastic bags, but the recycling rate for paper is higher. “
100% reusable, recyclable and biodegradable.
Easier to carry than plastic bags.
Holds more items than plastic bags = fewer bags to handle.
Environmentally preferred.
Contains 40% post-consumer recycled material.
A renewable resource - comes from trees.
High profit margin
COST ESTIMATION
Plant Capacity 50,000 Nos./Day
Land & Building (1000 sq.mt.) Rs. 1.55 Cr
Plant & Machinery Rs. 7.97 Cr
Working Capital for 2 Months Rs. 58 Lac
Total Capital Investment Rs. 10.37 Cr
Rate of Return 33%
Break Even Point 51%
APPENDIX – A:
01. PLANT ECONOMICS
02. LAND & BUILDING
03. PLANT AND MACHINERY
04. OTHER FIXED ASSESTS
05. FIXED CAPITAL
06. RAW MATERIAL
07. SALARY AND WAGES
08. UTILITIES AND OVERHEADS
09. TOTAL WORKING CAPITAL
10. TOTAL CAPITAL INVESTMENT
11. COST OF PRODUCTION
12. TURN OVER/ANNUM
13. BREAK EVEN POINT
14. RESOURCES FOR FINANCE
15. INSTALMENT PAYABLE IN 5 YEARS
16. DEPRECIATION CHART FOR 5 YEARS
17. PROFIT ANALYSIS FOR 5 YEARS
18. PROJECTED BALANCE SHEET FOR (5 YEARS)
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