Diapers Manufacturing Unit [Rs. 116.59 million, Feb-2021]

Diapers Manufacturing Unit [Rs. 116.59 million, Feb-2021]
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30 July 2021
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Disposable diapers are a great convenience in the modern world. A disposable diaper consists of an absorbent pad sandwiched between two sheets of nonwoven fabric. The pad is specially designed to absorb and retain body fluids and the nonwoven fabric gives the diaper a comfortable shape and helps in preventing leakage. The diaper market in Pakistan is growing at a steady rate during the last decade.

This particular pre-feasibility study is for setting up a ‘Diapers Manufacturing Unit’ in any major industrial city of Pakistan. The proposed unit will be equipped with latest diapers manufacturing line to produce high quality disposable diapers that will be sold to wholesalers and retailers. Target end-users will be children from the age of infants to four year olds.

The proposed unit can produce 26.40 million diapers in the sizes of 0 to 4 per annum based on 300 working days on 8 hours single shift bases. However, starting operational capacity is assumed at 65% with an annual increase of 5%, it will attain a maximum capacity utilization of 90% in 6th year of operation. 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 diapers industry, competitive pricing, and strong linkage with wholesalers and retailers are key factors for the success of this business.

Total project cost is estimated as Rs. 116.592 million with capital investment of Rs. 108.232 million and working capital of Rs. 8.360 million. Based on an equity finance model, the project NPV is around Rs. 25.248 million, with an IRR of 22% and Payback Period of 5.31 years. The project will provide employment opportunities to 22 people including the Owner. The legal business status of this project is assumed to be ‘Sole Proprietorship’.

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