PVC Shrink Sleeves Manufacturing Unit [Rs. 16.28 million, Jan-2021]

PVC Shrink Sleeves Manufacturing Unit [Rs. 16.28 million, Jan-2021]
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06 July 2021
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Polyvinyl Chloride (PVC) is a high-density material, which is most commonly used for manufacturing of shrink sleeves. The demand of PVC Shrink Sleeves are steadily increasing due to their extensive use in labeling, packaging and sealing of multiple products, e.g. Soft Drinks, Juice Bottles etc. Shrink Sleeve labels are full-color printed labels that utilize heat in the application process to conform the label to the shape of the container. The sleeve is placed around the product to which it will be applied. Once heat is applied to the material, the sleeve will begin to shrink or compress to the product. 

This particular pre-feasibility study is about ‘Shrink Sleeve Manufacturing’ made from PVC through extrusion process. The proposed unit can be established in Karachi, Lahore, Faisalabad or Sialkot as majority of the target customers i.e. manufacturers of Food and General Items packed in bottles and jars 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 unit will produce both printed and simple sleeves in different sizes as per the requirement of customers.

The proposed ‘PVC Shrink Sleeves Manufacturing’ unit will have an installed capacity of producing 84,000 kgs. of shrink sleeves per annum, based on a single shift of 8 hours and 300 operational days. It is assumed that 70% (58,800 Kgs.) of the total production capacity will be utilized for production of Printed Sleeves and the remaining 30% (25,200 Kgs.) will be used for ‘Simple / Clear Sleeves’ as per the customers demand. However, starting operational capacity is assumed at 70% with gradual increase of 5% in subsequent years up to maximum capacity utilization of 100% in 7th year. This production capacity is estimated to be economically viable and justifies the capital as well as operational cost of the project. Entrepreneur’s knowledge of the industry, competitive pricing, and strong linkage with industrial clients are key factors for the success of this business.

Total project cost is estimated as Rs. 16.283 million with capital investment of Rs. 14.562 million and working capital Rs. 1.721 million. Based on an equity finance model, the project NPV is around Rs. 21.925 million, with an IRR of 37% and Payback Period of 3.70 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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