Internship project presentation

Market Analysis and Physical Distribution of Moulded Plastic Industry

of

The power of

Presented by:Alok Jain - 13

COMPANY PROFILE

• Dhunseri Petrochem & Tea Ltd. Is a Sole

proprietorship company.

• Mr. C.K. Dhanuka is the Executive Chairman.

• Company is engaged into Tea production,

Polyethylene Terephthalate (PET) production

& IT infrastructure development.

Molded Plastic Industry In India

• Oligopolistic in nature• Cyclical Industry• Industry’s expected growth rate is 25 to 30 per cent in

next 5 to 7 years as compared to 12 to 15 per cent at present.

• Asia is the world largest plastic consumer of around 30 per cent of the consumption followed by N. America with 26 percent & W. Europe with 23 percent of the consumption

• Key growth segment is packaging with 35 per cent of the global consumption.

Objectives

1. Understand the undisclosed/under-disclosed

market of PET resin.

2. Distribution channel analysis.

3. PET bottle unit Set-up cost analysis at Haldia

Research Methodology

Market research design – Descriptive type. Scope of research – Molded plastic industry. Data Source – Primary/Secondary. Research Approach – Survey method. Research Instrument – Questioner Sample size – 110 samples. Mode of collecting data – Respondent to be

chosen randomly.

SWOT Analysis for Molded Plastic

STRENGTH

Industry Growth 12-15%Huge un-tapped marketGrowing awareness among people

WEAKNESS

Many authorized & un- authorized players.Un-awareness among rural population.Un-organized sector.

OPPORTUNITIES

Sustained increasing market growth in coming years.Huge population for un- taped market.

THREAT

Max. per cent of un-authorized playersToo many un-authorized manufacturers dilutes the profit margin.

Research and Analysis

Chart 1.

10%

90%

Classification of Respondent

Vendor (11)Consumer (99)

Chart 2.

>7 Lakh 4L to 7L 1.5L to 4L <1.5 Lakh Overall

Yes 84.75 68.65 58 51.5 61.25

No 15.25 31.35 42 48.5 38.75

5

15

25

35

45

55

65

75

85

Awareness of using PET Vs. Glass according to Income group

% o

f Aw

aren

ess

Chart 3.

Packaged drinking

bottle

packaged food

Pharma use

House deco

Cosmetic packing

Beverage Others

Column1 36 28 12 8 5 9 2

2.5

7.5

12.5

17.5

22.5

27.5

32.5

37.5

Awareness of using moulded plastic in different sectors

% o

f Res

pond

ent

Chart 5. Classification of sources of market information to the vendors

Other Manuacturers Internet Others

% 55 27 18

5

15

25

35

45

55

% o

f Res

pond

ents

PET bottle unit Set-up cost AnalysisParticulars Cost (Rs.) – in Lakh

Machinery 86.20

Human Resource 34.80

Land & Building 35.00

Over head 23.75

Total 179.75

Key assumptions:

300 days p.a. with two operating shifts per day & 8 hours / shift.

Annual production capacity 75,00,000 bottlesCapacity growth rate (yearly) 5 - 6 per centMaximum capacity utilisation 95 per centElectricity growth rate 10%Wages growth rate 10%Office equipment growth 5%Machine maintenance growth rate 5%

Financial Assumptions:

• List of Depreciation Rates:Building & infrastructure 5%Machinery & Equipment 10%Furniture & Fixtures 10%• Project Finance:Project life 10 years (after 10 years a renovation would

be required)Debt: Equity Ratio 50:50 Interest rate on long term debt 16%Discount rate for calculation of NPV 20%

Total cost Per BottleSize Weight

(Grams)Yearly

expected order in

lakhs

R.M Cost / bottle (Rs.)

a

F. Cost / bottle (Rs.)

b

T. Cost / bottle (Rs.)

a+b

.300 liters 9.5 15 1.80 2.20 4.00

.500 liters 15.5 20 2.40 3.50 5.90

1.0 liters 17.75 30 .90 1.60 2.50

2.0 liters 30.60 10 1.60 2.70 4.30

Net Loss in a year is Rs. 1,75,000Break even comes in 1 year 4 days

Limitations of PET bottles for entering into alcohol industry

• PET bottles allow oxygen to pass through,

which will spoil most of the wines and beers.

DISTRIBUTION CHANNEL

FindingsDhunseri Petrochem & Tea Ltd. Follows of multi

– party selling system of indirect distribution system.

DPTL has a dependent channel arrangement of contractual dealers, a long term contract is committed between both the principal and the distributors.

Findings Cont…

4 tier distribution channel followed by DPTL.

Manufacturer

C&F AgentsFinished product Manufacturers

Distributors

Retailers

Consumers

Recommendations

Distribution channel for new PET bottle unit.

Manufacturer

Distributors

Customer

End user

Reference

http://www.gits4u.com/water/water16.htmhttp://articles.economictimes.indiatimes.com/

2012-05-29/news/31888118_1_indian-standards-bis-spurious-units

http://articles.economictimes.indiatimes.com/2011-02-17/news/28554882_1_bottling-plants-rail-neer-rail-neer

http://en.wikipedia.org/wiki/Distribution_(business)

THANK YOU

Human Resources Numbers Monthly Salary Yearly Salary

Chief Executive Officer 1 1,05,000 12,60,000

Production Manager 1 55,000 6,60,000

Accountant 1 22,000 2,64,000

Injection Machine operator 2 17,000 4,08,000

Blow Machine operator 2 15,000 3,60,000

Helpers 4 8,000 3,84,000

Guards 3 4,000 1,44,000

Total 34,80,000

BACK

Annexure - 2

Machinery units Rate (Rs.) Amount (Rs.)

Injection Molding Machine – Type - I 1 17,50,000 35,50,000

Injection Molding Machine – Type – II 1 13,50,000 18,50,000

Blow Molding Machine – Type - I 1 3,50,000 8,00,000

Blow Molding Machine – Type - II 1 8,00,000 6,00,000

Compressor 1 1,50,000 4,50,000

Cooling Tower 1 1,50,000 2,50,000

Chiller Unit 1 80,000 1,75,000

Lathe (8ft.) - Refurbished 1 1,10,000 2,10,000

Lathe (5.5ft.) - Refurbished 1 72,000 1,70,000

Pillar Drill 26 inches with pump 1 50,000 90,000

Facer 1 1,50,000 2,50,000

Shaper 26 inch 1 1,25,000 2,25,000

TOTAL 86,20,000

BACK

Annexure - 1

Over head Expenses Amount (Rs.)

Insurance 1,75,000

Electricity 12,00,000

Furniture's & Fixtures 5,50,000

Machinery Maintenance 2,00,000

Stationary 1,50,000

Others 1,00,000

TOTAL 23,75,000

BACK

Annexure - 3