Wednesday, 2 January 2019

Paper cups - Small scale Industry


Paper cups are disposable cups made of paper and lined with wax or plastic to prevent liquid from soaking the paper. Paper cups are made using food grade paper, which is hygienic and capable of       storing both hot or cold liquid for long times. With the rising awareness and rapidly changing lifestyles, the demand for paper cups has increased tremendously year on year.             

         PAPER MANUFACTURING PROCESS                                                                                                                          
There are mainly three stages in manufacturing a paper cup. In the first stage, the paper cup’s sidewall paper shaped and formed . In the second stage the paper cups bottom paper    is shaped and joined with the shaped side wall .In third and final stage, the paper is preheated and bottom and rim curling is done to complete the paper cup.             
                                        
    LAND AND BUILDING 

 For a paper cup manufacturing business a covered area of about 500 square meter is required with an electricity connection .     
                                                                                   
  EQUIPMENT  
Automatic machinery for paper cup manufacturing business can be purchased from various vendors in India. The cost for automatic paper cut manufacturing machine is 8,50000and dyes would be required with a cost of Rs1,50000.           

               Labour requirements for setting up of paper cup manufacturing is minimal . Only about 3 persons are required.  Its recommended that there is one sales cum production manager, one skilled and one unskilled worker.     
                                                                                                                      
 Raw materials requirements raw materials in the form of printed PE paper ,bottom reel and packing material would be required for the paper cup business . The total investment in raw materials per month would be about RS 4 lakhs.                                                                                                       

 Profitability in paper cup  business The paper cup business setup with an investment of about  rs 10 lakhs in machinery and rs 15 lakhs in working capital would generate an anbual turnover of rs 66 lakhs . The total cost for production would be about rs 57 lakhs thereby providing profit of rupees 9 lakhs for the Entrepreneurs . The net profit ratio in paper cup business is usually about 14% and the rate of return on total investment is 39%.                                                

  Licenses  and registration  required To establish a paper cup manufacturing unit ,a minimum of rupees 10 lakhs investment is required for purchasing the equipment and raw materials. With an investment of 10 lakhs the paper cups can manufacture over 2.2 crore paper cups with an estimated sales turnover of over 66 lakhs. Since the business would achieve a turnover in excess of rupees 66 lakhs per annum its best to incorporate a company. With the business being registered as private limited company it would be easy for the Entrepreneurs to obtain bank loan scale up quickly and have the ability to bring on partners.                         

  In addition to to company registration the business would also require Vat registration  for selling paper cups.                                                                                                                                                                 
So that was all about paper cup industry business anyone who is interested can start this business.


- By Poorvi Bellap

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