feasibility study for establishing a plastic bottle caps factory an - najah national university...
TRANSCRIPT
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Feasibility study For Establishing a plastic bottle caps Factory
An - Najah National UniversityFaculty of Engineering
Industrial Engineering Department
Prepared by:
Maram Abd ElhaqNajah Emoor
Leena MaqboulShahd Abu Baker
For Palestine
Plastic industry
Company
Supervised by:
Eng.Nidal Dwaikat
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Establishing a plastic Bottle caps Factory
The main objective of the Project is to represent the economic feasibility
of Establishing Plastic Bottle caps Factory for the First time in West
Bank.
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Methodology
Financia
l Stud
y
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Market study
Market study
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Main Consumers
كوكا • الوطنية المشروبات شركةكوال
Target market
) مياه ) جريكوالمشروبات شركة تابع
الوطنية) عصائر ) كابيشركة تابع
الوطنية المشروبات
Top Drink(عصائر)
الحديثة النور شركةالمياه .لتكنولوجيا
( وعصائر (مياه فلسطين شركة ( ينابيع البيئية للتنمية
بيتا((مياه)
الفردوس شركة(مياه)
البالستيكية العبوات وبيع نفخ مصنعTick plast
الهندسية الشركةللتعبئة المتحدة
والتغليف
الجيبور شركة(مياه)
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Survey
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Demand sizeName of company Province type Demand (millions)
الوطنية المشروبات شركة( كوال , عصائر, مياه كوكا )
Ramallah neck28 24
)مياه(جريكو المشروبات شركة تابع
الوطنية
Ramallah neck30 12
( عصائر ( كابيالمشروبات شركة تابع
الوطنية
Ramallah neck30+neck38 18
Top Drink(عصائر)
Ramallah neck30 25
الحديثة النور شركةالمياه .لتكنولوجيا
( وعصائر (مياه
Talkarm Neck 28 5
للتنمية فلسطين شركةبيتا (البيئية )ينابيع
(مياه)
Nablus Neck 28 5
الفردوس شركة(مياه)
Jenin Neck 28 4.5
الجيبور شركة(مياه)
Qalqelia Neck 28 5
العبوات وبيع نفخ مصنعالبالستيكية
Tick plast
Ramallah Neck28 0.5
واوالده الرجوب شركة Hebron Neck 28 4المتحدة ا الهندسية لشركة
والتغليف للتعبئةNablus Neck 28 + Neck30 24
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Product SegmentProduct Segment
Cap Size
Annual consum
ption (million
s)Neck 28 58
Neck 30 58
Neck 38 10
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Market share
Our study suggests to cover
a percentage of nearly 40%
from the whole market demand
and that indicates to produce 50,800,000
cap
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Competitors
The main suppliers for plastic bottle caps
Supplier Country
Koksan company
Turkey
Amraz company
Israel
Netstal company
Swiss
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Technical Study
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Product specification
Beverage Drinks
coke Drinks water Bottle
Cap type
Weight
Size
Usag
e
Neck 38
Neck 30
Neck 28
1.85 2.55 3.7
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Capacity of project
Type Percent# of caps /
year
Neck 28 46% 23460000
Neck 30 46% 23460000
Neck 38 8% 4080000
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Manufacturing Process
Injection Molding Process
Mold
Injection molding machine
Raw material
(HDPE)
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MoldsMolds are
typically made of steel or aluminum. The mold has
many components, but can be split into
two halves. The two main components of
the mold are the mold core and
the mold cavity.
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Raw Materials
AMRAZ KOKSAN SABIC
HDPE
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Injection molding machine
Procedure:
Clamping.
Injection.
Cooling.
Ejection.
The process cycle for injection molding is very
short, typically between 2 seconds and 2 minutes.
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Injection Molding Machine
Hopper Dryer
Water Chiller
Auto loader
Pallet wrapping machine
Machines
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ExpensesConstitue
nt costsOperation
al costs
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Constituent costAssets Cost($)
Building 238805
Machines & Equipments 174818
Transportation 36111Furniture and required
tools12091
Contingency Reverse20.000 ( 3% of
Constituent Cost)Land price 127750
Land preparation 8000
Total costs 617575
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Land and construction cost
Land area Cost/m^2 Total cost
1500 $85 $127750
Construction cost Cost ($)
Buildings 232505
License 6300
Land preparation 8000
Total 246805
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Machines and Equipment
Machine Model Price ($)Injection Molding
Machine100 Kg/hr 36923
Hopper Dryer 75Kg 1172Auto loader 350Kg/hr 1015
Water Chiller 5 hp 3386Mixer Machine 50Kg 1386
Granulator Pc-300 1936Strapping Machine 3000
Total 48,818
Injection auxiliaries molding machines
Molds Price($)
Neck 28 42000Neck 30 42000Neck 38 42000Total 126000
Molds
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Operational costsTotal operating
costCost ($)
Manpower 40,667
Raw material 172760
Electrical consumption 16576
General operating cost 68745
Total 289748
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Raw material cost
Raw material
sQuantity
Price/quantity
($)
Total cost($)
HDPE 43 ton 1100 47300Tincture 43 kilo 40 1720Cartons 6517 2.5 16293Plastic Bags
6517 0.088 574
Shrink 217 kilo 3.33 723Total 66610
Raw material
sQuantity
price/quantity
($)
Total cost($)
HDPE 60 ton 1100 66000Tincture 60 kilo 40 2400Cartons 6517 2.5 16293Plastic Bags
6517 0.088 574
Shrink 217 3.33 723Total 85990
Raw materials
QuantityPrice/
quantity($)
Total cost($)
HDPE 43 ton 1100 47300Tincture 43 kilo 40 1720Cartons 6517 2.5 16293Plastic Bags
6517 0.088 574
Shrink 217 kilo 3.33 723Total 66610
Neck28 Neck 30
Neck 38
Total
$1727
60
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Cost Per item from raw material
We consider unit item equal to 1000 capsConsidering 3%
waste
TypeAnnual
quantity(caps)
Annual cost ($)
cost/item ($)
Neck 28 22756 66610 2.9
Neck 30 22756 85990 3.8
Neck 38 3958 20160 5.1
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General Operating Cost
General operating cost
Cost ($)
Maintenance 9050
Insurance, Advertising,
Communications33638
Depreciation 26057
Total 68745
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Cont…..
MaintenanceFixed assets Maintenance (%) Cost ($) Maintenance
cost($)Building 2% 232505 4650
Machinery and equipment
2% 174818 3496
Furniture 2% 9,091 182Transportation 2% 36111 722
Total 9050InsurancePosition Staff required Annual salary Percentage Value($)General manager
1 36000 0.5% 180
Engineers 1 30000 0.75% 225Accouters 1 21600 0.5% 108
Labors 3 43200 5% 2160Guide and
service1 15600 5% 780
Total 3453
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Cont………
Depreciation
Assets Depreciation Cost($)Depreciation
Cost ($)
Machinery and equipment
7% 174818 12237
Buildings 4 % 232505 9300Transport 10 % 36111 3611Furniture 10% 9,091 909
Total 26057
Advertising $20000
Communication and Services $8333
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Annual Production cost
Item
Annual production
cost for neck 28($)
Annual production
cost for neck 30($)
Annual production
cost for neck 38($)
Manpower 18707 18707 3253Raw
material 66610 85990 20160
Electrical consumptio
n7625 7625 1326
General operating
cost31623 31623 5500
TOTAL 124564 143944 30239
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Production cost / unit item
TypeQuantity (Caps)
Total cost ($)
Item cost ($)
Neck 28 22756 124564 5.5
Neck 30 22756 143944 6.3
Neck 38 3958 30239 7.6
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Facility Layout
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Financial Analysis
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Basic assumptions
The financial study covers 15 years from the project operational life.
Internal rate of return (IRR) is calculated at 100% equity ratio.
Net present value (NPV) is calculated at 5% discounted rate.
A strategic plan for increasing production at a rate of 5% and operational cost at rate of 2%.
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Direct and Indirect CostsOperational cost
Cost ($)
Direct operating cost
Raw materials
172760
Electrical consump
tion16576
Indirect cost
Manpower
40667
General operating
cost68745
Total 298748
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Selling Price
TypePrice
/item ($)Neck 28 7.7
Neck30 8.9
Neck38 10.7
Profit
Margin Is
40%
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Cash Flows
VAT 15%
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Financial Indicators
Payback period (PBP)
The period required to recover the
original investment
outlay through
the profits earned by
the project.
Which is found 4 Years
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Cont. ….
Internal rate of return (IRR)
is the discount rate that makes
the net present value
(NPV) of all cash flows
(both negative and positive) from a particular investment
equal to ZERO.
Which is NPV = F/
(1+i) n = 0.
And Found IRR= 30%
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Cont. ….
Net present
value(NPV)The Present value of an
investment’s future Net cash flows minus the
initial investments.
Which is
NPV= F/
And found Positively
$1,605,50
4.
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Cont. ….
Rate on investment
(ROI)The rate on return is the
average of the simple rate of return along
the project life period
ROI37%
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Cont. ….
Break even point (BEP)
The point at which sales
revenue equal production cost
(The Point at which the
project neither makes profit
nor suffers loss)
Item Units (caps) Cost ($)
Neck 28
13120 100543
Neck 30
1274 13629
Neck 38
10009 88637
Total 2440320280
9
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Sensitivity
analysis
Increasing operating cost 4%.
Decreasing operating cost 4%.
Decreasing Sales 4%.
Increasing Sales 4%.
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First Case : Increasing operating cost 4%.
IRR= 29%
NPV=$1320749
PBP= 4.5 years
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Second Case : Decreasing operating cost 4%.
IRR= 32%
NPV=$1721559
PBP=3.5
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Third Case : Decreasing Sales 4%.
IRR= 28%
NPV= $ 1390406
PBP= 5 years
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Fourth Case : Increasing Sales 4%.
IRR= 33%
NPV= $ 1827521
PBP= 3.2 years
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Sensitivity factors changes effects on IRR
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Recommendation
Our recommendation based on the Positive Financial
results which encourage to Perform this project.
And so we recommend Palestine Plastic Industrial
Co. to Establish the Factory which will gain a good
market share.
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