Plastic Collapsible Tubes Manufacturing Unit [Rs. 79.18 million, Feb-2021]

Plastic Collapsible Tubes Manufacturing Unit [Rs. 79.18 million, Feb-2021]
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18 June 2021
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Plastic collapsible tubes are flexible containers used for the storage and dispensing of products that usually have a pasty consistency, such as Tooth Paste, Adhesives, Ointment, Artist Paints, Cosmetics and Viscous Liquids. The demand of plastic collapsible tubes are steadily increasing due to their extensive use in packing of multiple products.

This particular pre-feasibility study is about ‘Plastic Collapsible Tubes Manufacturing’ made from Polyethylene through extrusion and molding process. The unit will comprised of inhouse extrusion line and automatic tube-head moulding machine. The proposed unit can be established in Karachi, Lahore, Faisalabad or Sialkot as majority of the target customers i.e. manufacturers of cosmetics, toothpastes and ointments etc. are located in these cities. According to the proposed business model, the unit will operate on ‘Order Manufacturing Basis’ for the industrial clients. The tubes will be produced in five different sizes (i.e. 15 gm, 20 gm, 40 gm, 60-70 gm and 100-200 gm) as per the requirement of customers.

The proposed ‘Plastic Collapsible Tubes Manufacturing’ unit will have an installed capacity of producing 5.76 million tubes per annum, based on a single shift of 8 hours and 300 operational days. However, starting operational capacity is assumed at 60% with gradual increase of 5% in subsequent years up to maximum capacity utilization of 90% in year 7. This production capacity is estimated to be economically viable and justifies the capital and operational cost of the project. However, the entrepreneur’s knowledge of the industry, competitive pricing, and strong linkage with industrial buyers are vital factors for the success of this business.

The total project cost is estimated at Rs. 79.184 million with a capital investment of Rs. 77.083 million and working capital of Rs. 2.100 million. Based on an equity finance model, the project NPV is around Rs. 11.163 million, with an IRR of 21% and Payback Period of 5.53 years. The project will provide employment opportunities to 19 people including the owner. The legal business status of this project is assumed to be ‘Sole Proprietorship’.

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