Corrugated paper box

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TABLE OF CONTANT
CHAPTER 1 INTRODUCTION ………………………………………………………1-2
1.1 INTRODUCTION
CHAPTER 2 MARKET POTENTIAL…………………………………………….….3-4
2.1MARKET POTENTIAL 3
2.2 SEGMENTATION BY END USER APPLICATION AND ANAYLASIS OF
CORRUGATED BOX PACKGING MARKET 4
2.3 GEOGRAPHICAL SEGMENTATION OF THE CORRUGATED BOX
PACKGING MARKET COMPETITIVE LANDSCAPE 4
2.4 THE KEY VENDOR IN THE MARKET 5
CHAPTER 3 BASIS AND PRESUMPTIONS………………………………………...6
3.1 BASIS AND PRESUMPTIONS 6
CHAPTER 4 TECHNICAL ASPECTS……………………………………………....7-8
4.1 PROCESS OF MANUFACTURING 7
4.2 OPERATION 7
4.3 PLANT & MACHINERY 8
4.4 ADVANTAGE 8
CHAPTER 5 LAND AND UTILITIES………………………………………..………9
5.1 LAND 9
5.2 UTILITIES 9
5.3 IMPLIMENTATION SCHEDULE 9

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CHAPTER 6 ASSUMPTION………………………………..………………..………10
6.1 ASSUMPTION 10
CHAPTER 7 FINANCIAL
ASPECT………………………………………………11-13
7.1 FIXED CAPITAL 11
7.1.1 MACHINERY AND EQUIPMENT 11
7.2. WORKING CAPITAL (per month) 12
7.2.1. PERSONAL 12
7.2.2. Raw Material 14
7.2.3. Utilities 15
7.2.4. OTHER CONTINGENT EXPENCES 13
7.2.5. TOTAL RECURRING EXPENDITURE (per month) 13
7.3. TOTAL CAPITAL INVESTMENT 13
CHAPTER 8 FINANCIAL ANALYSIS ………………………………………….14-15
8.1. Cost of Production (per annum) 14
8.2. Turnover (per annum) 14
8.3. Net Profit (per annum) 14
8.4. Net Profit Ratio 14
8.5. Rate of Return 15
8.6. Break-even Point 15

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CHAPTER 1
INTRODUCTION
Packing, in a way represents the extent of industrialization of a country. The more industrially
advanced , the more advanced is its state of packaging. Estimates indicate that packaging
represents 5% of total cost and prevents loses to the tune of 20%. Corrugated boxes have made
significant strides in packaging either as a primary pack, secondary pack or as a transport
container. Corrugated boxes have successfully replaced other packaging and are now being
widely used for packaging fruits, vegetables, canned foods, chemicals, pharmaceuticals,
electrical appliances, garments etc.
Corrugated fiberboard is a material consisting of a fluted corrugated sheet and one or two flat
linerboards. It is made on "flute lamination machines" or "corrugators" and is used in the
manufacture of shipping containers and corrugated boxes.
The corrugated medium and linerboard board both are made of kraft containerboard, a
paperboard material usually over 0.01 inches (0.25 mm) thick. Corrugated fiberboard and
paperboard are sometimes called corrugated cardboard, although cardboard might be any heavy
paper-pulp based board.
Corrugated Paper boxes are extensively used in the packaging of industrial as well as consumer
goods. In some of products like crockery, electronic items, automobile components, glass and
cigarettes, pharmaceuticals, soaps & cosmetics, biscuits, hosiery, toys, rubber & rubber
products, refrigerator, cooler & fans, proper type of packaging becomes very important.
Several properties and characteristics can be measured for corrugated board. Included are;
• Edge crush test
• Burst strength
• Flat crush test
• Bending resistance
• Impact resistance
• Cushioning, shock absorption[4]

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• Tear resistance
• Grammage (mass per unit of area) for components and for combined board
Corrugated fiberboard has a higher stiffness (resistance to bending) than flat fiberboard of equal
mass, especially parallel to the corrugations. This can be explained by the Theorema Egregium.
The pleated board is roughly isometric to a flat plane, which has a Gaussian curvature of 0.
Since the material is curved in one direction, perpendicular to the pleats, it must remain flat in
the direction parallel to the pleats.

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CHAPTER 2 2.1:- MARKET POTENTIAL
With the steady rise in the industrial production, the demand for corrugated paper boxes
increasing every year. These boxes have got distinct advantages such as light in weight, easy
to fabricate as per required specifications. The corrugated papers and boards may also find
market in the rural areas for packing of fruits, vegetables & eggs.
The corrugated box industry is an inevitable part of manufacturing sectors which rely heavily
on ample corrugated packaging for finished goods transportation and handling. Despite this
importance, the Indian corrugated box industry has faced numerous challenges and hurdles in
its growth pace due to the very nature of the industry comprising thousands of small players
running manual/semi-automatic plants to cater to the needs of local nearby industries.
However, the tide of liberalization and globalization has brought new ray of hope for Indian
manufacturers who are now more willing to upgrade technology and turn into completely
automatic lines capable of faster, quality driven and economical production.
Market analysis of corrugated box packaging
Technavio’s market research analyst predicts the global corrugated box packaging market to
grow at a CAGR of around 5% during the forecast period. The increased demand from the
ecommerce industry is driving the growth of this market. Online retailers use different types of
corrugated boxes based on the kind of product transported to ensure the safety of the products.
Effective packaging is fast becoming one of the key business requirements in the e-commerce
marketplace.
The growth of the processed food industry is also expected to contribute to the market growth
during the forecast period. The packaging of processed food requires secure and flexible
packaging material, which is convenient to the customer and also ensures product safety. As
consumers look for convenient, easy-to-use, and lightweight packaging, innovative paperboard
packaging solutions are being developed by packaging manufacturers to tap the growing
organized retail and processed food market.

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2.2:- Segmentation by end-user application and analysis of corrugated box packaging
market
Food and beverage products
Electronic goods
Personal and household care goods
Glassware and ceramics
Paper products
Chemicals
Textile goods
Other non-durable goods
The food and beverage products segment dominated the corrugated box packaging market
during 2015 with a market share of 42%. The increased demand for processed food products,
especially in Latin America is driving the growth of this segment. This report anticipates this
segment to retain its market leadership and reach a market value of around USD 32 billion by
the end of 2020.
2.3:- Geographical segmentation of the corrugated box packaging market
Americas
APAC
EMEA
The Americas accounted for 41% of the market share during 2015 and is expected to reach a
market value of around USD 31 billion by the end of 2020. The growth of the e-commerce
industry in this region has been driving the market growth. The US is the largest market for
corrugated boxes in this region due to the increase in cross-border trade and huge demand for
online shopping.

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2.4:-Competitive landscape and key vendors
The market is highly fragmented with the presence of numerous local and international
suppliers. Vendors in this market compete on the basis of product differentiation, portfolio, and
pricing. Companies are expanding their business by setting up new manufacturing plants and
launching new products in the emerging markets. Market analysts anticipate a stiff pricing
competition among vendors during the forecast period owing to the influx of new providers in
this market.
2.5:-The key vendors in the market are -
Mondi
Georgia-Pacific
International Paper
Roch-Tenn
Smurfit Kappa
The other prominent vendors in the market include Archis Packaging, Bates Container,
BioPAPPEL SAB de CV, Carter Holt Harvey, Clarasion, DS Smith, Dunapack Packaging,
Emin
Leydier, Europac Group’s Packaging Division, Induspac, Interstate Resources,
MeadWestvaco, PCA, Sonoco Products, and U.S. Corrugated.

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CHAPTER 3
BASIS AND PRESUMPTIONS
The estimates are drawn for a production, capacity generally techno economically viable for
model type of manufacturing activity. The information supplied is based on a standard type of
manufacturing activity utilizing conventional technique of production and optimum levels of
performance. The costs in respect of machinery and equipment’s, raw materials and selling
prices of the furnished products etc. are those generally obtaining at the time of the preparation
of project profiles and may vary depending upon various factors. Whereas some names of
manufacturing/supplies of machinery and equipments, raw material are indicated at the end of
profile, these are by no means exclusive or exhaustive.
Corrugated board can be classified as under :
1. Single faced corrugated Board (2 ply)
2. Double faced corrugated Board (3 ply or single wall)
3. Double wall corrugated Board (5 ply or double wall)
4. Triple wall corrugated Board (7 ply)

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CHAPTER 4
TECHNICAL ASPECTS
4.1. Process of Manufacturing
Calculation has been based on single corrugated sheet pasted with one sheet of craft paper.
Two paper reels are run together on corrugated machine. One layer of paper becomes
corrugated after passing through the heated fluted rolls and other is brought in contact with the
former having been glued at the tips. These two get pasted together and are wound in rolls.
These will be procured on job work. By cutting this roll with board cutters and gluing the
corrugated side on pasting machine. A double face board is produced by the 3rd ply of paper
over it. This board is kept under a sheet pressing machines for some time for setting of wet
glued sheets. Similarly board to board can be pasted to form thicker board i.e. 5 Ply, 7 Ply and
9 Ply etc.
4.2:-Operations
The process of manufacturing boxes or containers constitutes five operations.
1. Slitting or longitudinal Cutting
2. Creasing
3. Slotting
4. Flap or Corner Cutting
5. Stitching
After passing the sheet through these operations, a Box or a Container is ready.
Slitting and Creasing operations can simultaneously be carried over a 4-bar Rotary
Cutting Machine & Creasing Machine. The trimmed and creased sheet is slotted and
flap cut on an Eccentric Slotter Machine. Finally, it is either stitched over a Stitching
Machine or glued/taped manually. For Partition boxes, the half slotted boards are used,
which can conveniently be produced over a Partition Slotter Machine.

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4.3:-Plant & Machinery
The main items of the machinery required for the manufacture of Corrugated Boxes are given
below:
I. One 4-Bar Rotary Cutting & Creasing Machine, 75” Size
II. One Eccentric Slotter Machine, 75” Size
III. Two Stitching Machines
i) One 36” arm, Angular head ii)
One 36” arm, Straight head.
IV. One Partition Slotter, Automatic Machine
V. One Single Slotting Machine, 12” Size
4.4:-Advantages
The Corrugated Boxes have the following advantages:
1. Effective cushioning materials.
2. Light weight (freight advantage)
3. Easy to fabricate
4. Easy for storing
5. Easy for disposal
6. Pilfer-proof
7. No strapping necessary
8. Articles kept dust free after sealing
9. Can be made water resistant
10. Printing & Advertising advantage
11. Desired in Export Market

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12. Eliminates dependency on natural wood
13. Recyclable
14. Expedites production due to on line conveyor packing.
CHAPTER 5
Land and Utilities
5.1:- Land
An area of 2000 sq.ft is required for this project.
The space can be arranged on lease.
The rent is assumed at Rs. 16000 p.m and advance will be about Rs. 1.60 lakhs.
5.2:- Utilities
Power: The power requirement is 15 KW.
Water : Water is required for human consumption only.
Manpower: Labour requirement of the unit is estimated as follows.
5.3:- Implementation Schedule
The machines are available from supplier within one month’s period. The project can be
implemented within a month period.
IMPLEMENTATION SCHEDULE
Quotation period _ 10 days
Provisional registration _ 10 days
Sanction of loans _ 2 months
Delivery and erection of machine, _ 1 month

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CHAPTER 6
Assumptions
• The unit would work for 300 days on single shift basis. The unit can generate 300 MT
boxes per annum.
• The selling price is assumed as Rs.52000/- per MT.
• Capacity utilization is assumed at 60%, 70% and 80% for first three years.
• Raw Materials cost is assumed at Rs 110.39 lakhs per annum.
• Power charges works out to Rs.1.80 lahs- per annum.
• Wages & Salaries works out to Rs. 9.21 lakhs per annum.
• Repairs & Maintenance is assumed at Rs.2000 p.m
• Depreciation calculated @ 15% on Plant & Machinery on WDV method.
• Selling, General & administrative expense is estimated at Rs.20,000 per month.
• Interest on TL is provided at 12% p.a. on reducing balance.
• Interest on Working Capital is calculated at 12% p.a.
• Income tax is provided at 33.99% on profit.

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CHAPTER 7
FINANCIAL ASPECT
7.1. Fixed Capital
Land &Building: Covered area of 200 sq. ft. & uncovered area of 50 sq. ft. on rent.
An area of 2000 sq.ft is required for this project.
The space can be arranged on lease.
The rent is assumed at Rs. 16000 p.m and advance will be about Rs. 1.60 lakhs.
7.1.1. Machinery and Equipments
S.No. Particulars Amount (Rs.)
i) Cutting machine 65,000
ii) Paper Pasting machine size 75" complete with motor 90,000
iii) Stapler 36” 45,000
iv) Testing Equipment, Physical Balance meter scales 15,000
v) Generator set 5 KVA 45,000
vi) 2 Bar Rotary machine for creasing & sizing 1,00,000
vii) Accentric Slotter 1,80,000
viii) Installation & electrification 54,000

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ix) Officer furniture 76,000
TOTAL 6,70,000
7.2. Working Capital (per month)
7.2.1. Personnel
S. No. Designation No. Salary (Rs.) Amount (Rs.)
1 Manager (self) 1 15,000 15,000
2 Production Supervisor 1 11,000 11,000
3 Salesman 1 9,000 9,000
4 Skilled workers 2 9,500 19,000
5 Unskilled workers 2 8,500 17,000
TOTAL 71,000
Perquisite@ 15% 10,650
Grand Total 81,650
7.2.2. Raw Material
S.No. Description Qty Rate Amount (Rs.)
1 Craft Papers 15 tons Rs.30/kg 4,50,000
2 Glue 1 ton Rs.10/kg 10,000

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3 Staples wire etc. 500 kgs. Rs.40/kg 20,000
4 Packaging Material 20,000
TOTAL 5,00,000
7.2.3. Utilities
S.No. Description Amount (Rs.)
1 Power 2,000 units @ Rs.5/- per unit 10,000
2 Diesel 100 liter @ Rs.50 per liter 5,000
3 Water 500
TOTAL 15,500
7.2.4. Other Contingent Expenses
S. No. Description Amount (Rs.)
1 Rent 15,000
2 Postage, stationery Telephone 1,000
3 Repair & Maintenance 2,000
4 Transport & Travelling 4,500
5 Consumable Stores 2,000
6 Corrugation charges @ Rs.5 per kg 70,000
7 Misc. Expenses 5,500
TOTAL 1,00,000
7.2.5. Total Recurring Expenditure (per month)
S. No Description Amount (Rs.)

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1. Raw Material 5,00,000
2. Salary & Wages 81,650
3. Utilities 15,500
4. Other Expenses 1,00,000
Total 6,97,150
Say 6,97,000
7.3. Total Capital Investment
Total Fixed Capital Rs. 6,70,000
Total Working Capital (for 3 months) Rs. 20,91,000
Total Rs. 27,61,000
CHAPTER 8
FINANCIAL ANALYSIS
8.1. Cost of Production (per annum)
S.No. Description Amount (Rs.)
1 Recurring Expenditure 83,64,000
2 Depreciation on Machinery & Equipment @ 10% 54,000
3 Depreciation on furniture @ 20% 15,200
4 Interest on capital investment @ 15% per annum 4,14,150
Total 88,47,350
8.2. Turnover (per annum)
Considering 2.5% processing wastage;

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Total production = 175.5 tons
Wastage = 4.5 tons
Sales of 175.5 tons paper boxes @ Rs.56,000 per ton Rs. 98,28,000
Sales of 4.5 tons wastage @ Rs. 7,200 per ton Rs. 32,400
Total Rs. 98,60,400
8.3. Net Profit (per annum)
= Turnover – cost of production
= Rs. 98,60,400 – 88,47,350
= Rs. 10,13,050
8.4. Net Profit Ratio
Net profit per year
= X 100
Turnover per year
= X 100
= 10.3 %
8.5. Rate of Return
Net profit per year
= X 100
Total Capital Investment
= X 100
= 36.7 %
8.6. Break-even Point
Fixed Cost Value (in Rs.)
Depreciation on Machinery @ 10% per annum 54,100
Depreciation on Furniture @ 20% per annum 15,200

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Interest on total investment 4,14,150
Rent 1,80,000
40% of salary & wages 3,91,920
40% of other expenses 4,08,000
Total 14,63,370
B.E.P
Fixed Cost
= X 100
Fixed Cost + Net Profit
= X 100
= 59.1%

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