Industry analysis

Indian packing industry

The current wave of economic development in India is being seen from all over the world. As
infrastructure, manufacturing, agriculture, and services grow at high rates the packaging industry
is also showing great variety and depth in its growth. India’s packaging industry may achieve an
annual turnover as high as US$ 5 billion in the current financial year with a growth rate nearly 25
per cent in significant segments. Leading companies in the Indian packaging industry show a
compound annual growth rate of 30 per cent, and the Indian Rupee is strengthening against the
US dollar at annual rate of 4 to 5 per cent. Even then, the US$ 5 billion figure would represent
about one per cent of the current global packaging industry.
In 2001, the packaging industry worldwide generated an annual estimated turnover of US$ 417
billion. The major regions that made up this total include Europe, US$ 129 billion; North
America, $116 billion; and Japan, US$ 81 billion. India’s consumer packaging accounted for just
US$ 2.3 billion in that year, that is about half of one per cent of the global packaging volume.

Packing industry in 2001

Today, packaging is produced more quickly and efficiently. It is generally lighter in weight, uses
less material, is easier to open, dispense from, reseal, store, and dispose. Packaging has evolved
from a relatively small range of heavy, rigid containers made of wood, glass, and steel, to a broad
array of rigid, semi rigid and flexible packaging options increasingly made .

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Flexible packing

Flexible packaging consists of multi-layer laminated sheets of plastics (PVC, LDPE, HDPE,
BOPP, BOPET), paper, cloth, or metal foils that are used separately or in combination for
various packaging applications. However, this article discusses flexible packaging as laminates
of plastics that have a unique set of properties that ensure toughness, moisture resistance, aroma
retention, gloss, grease resistance, heat sealability, printability, low odour and taste. These find
use in packaging food, tea, coffee, spices, chewing tobacco, bakery, confectionary, oils, and in
certain other non-food applications such as household detergents.

Causes of Flexible Packaging

• Protection: Flexible Packaging gives total consumer protection by keeping the product
clean and protecting it from pilferage and adulteration
• Barrier: It provides good barrier properties against moisture and gases and protects food
from damage and wastage
• Convenience: It provides convenience of handling and disposal after use
• Cost Saving in Material: Flexible Packaging is light — a one kilogram oil pack weighs
less than 10 grams compared to at least a 40 gram HDPE jar or 32-35 gram of PET,
thereby giving tremendous saving in raw material cost.
• Cost Saving in Storage and Transport: It fits closely to the shape of the contents and
saves cost of storage and transport.
• Savings in Raw Material Consumption: Tremendous saving in raw material
consumption, serving the national cause by extension of usage at least times four times.
• More Per Pack: It provides much more product per a given amount of package. Good
examples include coffee, nuts and snacks that come in foil brick packs and pouches rather
than in cans or jars; juice sold in pouches rather than in rigid containers, and household
cleaner refills that come in thin pouches rather than in glass bottles.
• Smaller Units Possible: Thus the option to buy only the required quantity at a time.

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 • Conservation of Energy: Considerable conservation of energy for conversion. For a
steel coffee can to be efficient as a foil brick pack, the can would have to be recycled at a
rate of 85 per cent. However, steel cans are currently being recycled at a rate of about 45
per cent.
• Important in Lifestyles: Convenience foods, individually packed small servings,
microwaveable meals, “easy opening” packaging, secure packaging for pharmaceuticals
and hazardous substances, are all examples of packaging playing a role in assisting and
promoting our lifestyles.
• Builds Brands: Helps product manufactures enhance brand images, increase sales and
realize new market opportunities

Flexible Packaging Demand in India and Worldwide

World demand for converted flexible packaging will grow at more than 4 per cent per year
through 2005 to nearly 14 million metric tons, with a value exceeding US$ 50 billion. The best
gains are expected in the world’s emerging markets, including Eastern Asia, Eastern Europe,
Africa, and Middle East. India holds largely untapped markets with a potential of double digit
market growth. The flexible packaging industry in India is currently estimated to be US$ 1
billion and records a high growth rate of approximately 20 per cent.

The expansion of the Indian flex-pack market has accelerated due to:

• A growing middle class of over 300 million.

• The conversion of the more traditional rigid packaging into flexible forms.
• A favourable government tax structure. Excise duty that was once 24% has been reduced
to 16%.
• Liberalization of the Indian economy since 1991.
• Globalization and the influx of multinational companies.
• Modern plants and equipment available to the flexible packaging industry.

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Considering these factors it is only obvious that flexible packaging has a very bright future in
India and is here to stay and grow in a big way.
The major Indian players in flexible packaging

The Indian packaging industry is a combination of organized large Indian and International
companies and the unorganised small and medium local companies. The organized sector of the
industry may be less than 5 per cent of the companies in the overall industry but it nevertheless
controls over 70 per cent of the market by volume. The organized sector operates in the
laminated product segment such as form-fill-seal pouches, Tetra packs, and lamitubes.

Converted Flexible Packaging Demand

Item 1990 1995 2000 2005 2010

Converted Flexible Packaging

63 153 295 595 1125
Demand

By Material Polyethylene 19 54 100 190 340

Polypropylene 5 20 60 160 360

Other Plastics 19 35 60 105 175

By Market Non-food 16 39 74 146 270

Paper and Foil 20 44 75 140 250

Food 47 114 221 449 855

There are around 13,000 converters in India — a majority in the small and medium sector
located in all parts of the country. It is estimated that there are more than 200 flex-pack (flexible

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packaging) converters in India – 50 units in the organized sector constituting 40 per cent of the
Indian flexible packaging industry and about 150 in the unorganized sector that make up the
remaining 60%. Most small operations have processing capacities of less than 250 tons a month
and produce over wraps, co extrusion films, and polysacs.At least ten flex-pack converters
process more than 4,000 T/annum and are on par with leading international operations. These
larger Indian flexible packaging companies include

• Flex Industries Limited

• Paper Products Limited (Huhtamaki Group)
• Positive Packaging
• Multiplex
• Paharpur Industries Limited

Demand in India

The current demand for flexible packaging in India stands at about 500,000 tons.

Consumption of Flexible Packaging — India in Comparison to the Rest of the World

According to industry experts, annual flexible packaging consumption per capita in various parts
of the world is roughly as follows:

• N. America : US$45
• Japan : US$31
• W.Europe : US$25
• S.Korea : US$15
• Thailand : US$3
• China : US$2
• India : US$1

It is also observed that a mere 20 per cent of the population in India consumes 80 per cent of the
packaged production whereas the remaining 80 per cent of the population have an access to only

5
20 per cent of the packaged production. There exists an exceptional gap in India between the
necessary and actual demand for packaging of essential commodities and this is one of the major
reasons why the growth of flexible packaging

Major segments

The consumer market dominates the global packaging industry and accounts for an estimated 70
per cent of sales, with industrial applications taking the remaining 30 per cent of the share. The
food industry is the single largest end-user market, valued at around US$ 145 billion, followed
by the beverage industry at approximately US $75 billion.

A high degree of potential exists for almost all user segments in India which are expanding
appreciably:

• Processed Foods
• Mouth Fresheners (pan masala)
• Beverages
• Confectionary
• Bakery Products
• Spices
• Edible Oils
• Soaps and Detergents
• Drugs and Pharmaceuticals
• Cosmetics and Personal Care
• Chemicals and Fertilizers
• Office Stationary
• Engineering Products
• Tattoos

According to Fredonia, food and agricultural markets dominate the sales of converted flexible
packaging in India and will continue to expand on account of several factors — rising
consumption of packaged foodstuff; the increasing presence of multinational food and beverage

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firms in India; the trend towards additional processing of food grains and fresh produce; ongoing
efforts to improve sanitation and food safety.

The Indian processed food industry stands at about US$ 30 billion and accounts for about 13 per
cent of the country’s exports and involves 6 per cent of the total industrial investment in the
country. Of this packaged food stands close to only about US$ 0.85 billion. Thus there is a
tremendous potential for growth of flexible packaging in the food and processed food sectors.

Going by the available data, an estimated 250,000 tons of flexible packaging materials for retail
sales in the form of laminates and co-extruded films were consumed in India last year to pack a
very large spectrum of products covering processed and convenience foods, fruit juice,
beverages, dry and malted products, spices, tea, coffee, edible oils, toiletries, cosmetics, motor
oils, and other products. Almost all the raw materials required in flexible packaging such as
BOPP, PET, PE granules, aluminium foil, adhesives, and printing inks are made in India. These
inputs are of international quality and are exported worldwide.

Packing equipment manufactured in India

India makes most of the equipment needed by the converting industry, including rotogravure
printing presses, laminators, slitters, and pouching machines. A full range of semi-automatic to
fully automated filling, sealing and wrapping machines is manufactured in India. These machines
are of high quality and are very competitive in price and are exported in a big way to developed
countries as well. There are some 600 to 700 packaging machine manufacturers, 95% of which
are in small and medium sector and located all over the country.

The Indian market for food packaging equipment amounts to about US$ 80 million. Currently, a

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mere 2 per cent of India’s food production is being processed, and there are plans in place to
increase the food processing level to 10 per cent over a period of ten years thereby increasing the
demand for packaging equipment manifold. Another sector with a large demand for packaging
machinery is the Indian cosmetic packaging segment that is expected to grow at a rate of over 20
per cent in the next few years.

The flexible packaging industry has a very crucial role to play in the lives of the ordinary people
of India and thus has a great future here. Every broad industry or agricultural sector that
consumes flexible packaging has its own unique and dynamic set of requirements. The huge
possibilities latent in each of these sectors have to be defined and cultivated. India is indeed a
dynamic, developing and demanding market and most of its potential has not yet been identified,
leave apart conquered or covered. As new aspects of this market and its consumers’ behaviours
are defined and chalked out everyday.

Quality processes such as Six Sigma, waste minimization, the optimisation of supply chain
efficiency through, for example, eCommerce initiatives, can contribute much to improved
performance. So can “added value” products and services and an imaginative approach to
meeting customers’ needs. In a world where commoditization is a fact, it’s evident that
companies that develop unique products and services that are “genuinely out of the box”
solutions to end users’ problems will gain a significant competitive edge. Goethe rightly said,
“Knowing is not enough, we must apply. Willing is not enough, we must do.”

INTRODUCTORY PAGE

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 “Go green” Packing pvt Ltd,

Near express highway,

Nadiad,

Dist. Anand

Gujarat,India

www.gogreen.com.

Name of the partners & proprietors

1. Sandeep Vaghela

Jamnotri apt.

9
 Ilora park,

Vadodara.

Phone no:- 9537333888

E mail:- sandeep.vaghela@gmail.com

2. Sunil Bhalani,

At. Padadhari

Dist-Rajkot

Phone no:- 9725055005

E mail:-sbhalani@ymail.com

3. Kiran Solanki

87,Gujarat housing board,

Nr.Ahmedabad Highway

Vallabhipur-364310

Dist. Bhavnagar.

Phone no:- 9724992538

E mail:- kiransolanki@ymail.com

4. Parshotam Kalia

Airport road,

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 Bhavnagar.

Phone no:- 8866370521

E mail:- parsotam_kalia@yahoo.com

Nature of business

This business basically started with taking into consider environmental concern in packing and
try to make environment friendly bag basically for wastages and using other environment
friendly material. Packing bag which are made for waste papers like news papers. Bags basically
for medical and kirana stores because they are the highest users of packing bags. On the monthly
basis by taking order advance for the whole year.

Financing

The business on the initial basis requires around 50 lacs for infrastructure development and initial
operation of the production. And the main source of finance is from bank loan and letter on after
development our company we will also went for IPO for expansion purpose.

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 ORGANISATION PLAN

Form of ownership

We are going for partnership firm for our business operati

Name of the partners

1. Sandeep Vaghela

Jamnotri apt.

Ilora park,

Vadodara.

Phone no:- 9537333888

E mail:- sandeep.vaghela@gmail.com

2. Sunil Bhalani,

At. Padadhari

Dist-Rajkot

Phone no:- 9725055005

E mail:-sbhalani@ymail.com

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 3. Kiran Solanki

87,Gujarat housing board,

Nr.Ahmedabad Highway

Vallabhipur-364310

Dist. Bhavnagar.

Phone no:- 9724992538

E mail:- kiransolanki@ymail.com

4. Parshotam Kalia

Airport road,

Bhavnagar.

Phone no:- 8866370521

E mail:- parsotam_kalia@yahoo.com

Authority of principals

The main authority for the operation and business is in the hand of owners. And the ultimate
authority of decision is in the hand of the owners and they are responsible for any matter in the
company.

Management team background

CEO of the company: - Kiran solanki (BBA, MBA-Marketing, also owner of the company

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Board of directors :- Sandeep Vaghela (LLB, MBA HR) owner

Sunil bhalani (MBA MARKETING) owner

Parshotam Kalia (MBA FINANCE) owner

Kiran Solanki (MBA MARKETING)

General Manager:- Manan Bora (MBA MARKETING)

Marketing manager: - Nirav gajjar (MBA MARKETING)

Financial manager:- Kruti Desai (MBA FINANCE)

HR manager: - Bincy Thomas (MBA HR)

Legal advisor:- Sandeep Vaghela ( LLB, MBA-HR)

Technical advisor:- Akash Kambad (MCA)

ORGANIZATION HIERARCHY

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 C.E.O.

General Manager

Marketing Manager HR Manager Finance Manager

Labors

DESCRIPTION OF THE BUSINESS

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Mission statement of the company

“To become a reputed coconut water pouch making firm in Gujarat”

Vision of the company

“To make healthier product and to deliver superior value to our customers”

Objectives of the company

The company come up with following objectives

• To provide low cost coconut pouch.

• The another objective is to healthier product

• We also want to provide employment opportunities to poor people by giving them easy
unskilled workers.

Future goals & expansion

The company at the initial stage target market of Baroda & Ahmedabad only but in future that
will expand their market in all over Gujarat. The another thing is company go for more
production at Bhavnagar and Rajkot after 3 years of their operation. In future company also
wants to adopt more technology during production process to make production fast & easy.

Products

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At the initial level company want for limited packaging only for medical and Kirana stores. So
we have to offer bags in different shapes according to the quantity or products purchase by the
consumers.

Two types of packing bags we want to produce

1. Paper bags from the waste papers

2. Bags from waste tyres

The bags range on the basis of quantity or weight of the products

Like for 250 gm, 500 gm, 1 kg, 2kg in paper bag

Above 2 kg tyre bag for packaging.

Services

As per as the services are concern company only provide distribution service to the place of
retailers by their own distribution channel and equipments.

Size of the business

At the initial level the size of the company is small scale but latter on we want to make it medium
scale enterprise by covering more market. Company at the initially started its operation into
limited areas only latter on make target for whole Gujarat market.

Office equipments and Personnel

As per as the office equipments are concern we need basic furniture for the office, computers,
telephone connection, fax machine and stationeries for the office purpose.

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As per as the personnel or human resource management is concern we need both skilled as well
as unskilled people for our business operations.

Skilled workers

In skilled worker we require following skilled persons

General Manager

Marketing manager

HR manager

Finance manager

Legal advisor

Technical advisor not on the permanent basis

Unskilled workers

Unskilled workers which are basically for labour or primary workers. We take both women as
well as men workers for this purpose.

PRODUCTION PLAN

Location of the Production plan

“GO green” Packing Pvt. Ltd
Near express high way
Nadiad
Dist: Anand,
Gujarat, India

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Go green private Limited is located at Nadiad. This place is selected as a location because at the
initial stage the target market for the company is Ahmedabad and Vadodara and this place is
centre point between both the place and become convenience in transportation as well as supply
of raw materials as well as finished goods. Production basically need unskilled workers which
also include women and we easily get this at cheaper cost of labour. And the land available at
this place is also cheap.

Availability of workers for production

Go green packing Pvt. Ltd. Basically wants two types of worker unskilled workers and skilled
workers which are limited of two or three at the initial stage for the management as well as for
design of the packaging bag.
And we take both male as well as female as worker in our company.

Electricity
We need limited amount of electricity for the purpose for sticking machine and for the purpose of
basic requirement of air for our workers

Space for production activity

we want a production of 2,00,000 bags at initial level and for that we want to construct a building
with basic infrastructure facilities like enough sitting facilities, so we need space around 1000
square feet.

Production activities
The production done in basically two phases in our company premises only in two different
buildings

1. Here activities related to basic shape for the bag are done
2. Designing and final touching done in other premises by our skilled worker

Plant layout

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In our production area we construct basically two buildings and near by area for our basic
requirement like canteen, sanitation, rest room, and other space we try to provide natural
environment by planting trees in our premises

Raw materials

These are the materials which are use for the production of waste paper bag

1. Waste newspapers

2. Grey back duplex

3. Rivets

4. Jute threads

Manufacturing process

For the producing packing eco friendly bag we have to follow following simple steps

Step -1

First and foremost step in which we have to make cutting of the paper according to the shape of
the bag which we require with the help of cutter

Step – 2

After that they attach grey back duplex at the bottom for increase capacity of bag in terms of
weight.

Step – 3

After that we have to stick all the cutting parts and also tied jute threads with it

Step – 4

This work at this stage in which the designing and final touching is doesn’t in to another
department with the help of experts.

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 MARKETING PLAN

Executive Summary

“Go green” packing private limited produce an eco friendly packing bag. This marketing plan
illustrates our market segments and the strategies we are employing to get customers and create a
solid revenue stream. We are not only concern about packing business but, Our unique focus not
only do business but we want environment protection as a part of social responsibility in our
business. We market our products mainly by taking into consider environment friendly

We will fund development of our business of packing by providing different designs and size by
taking help of different contractor.

Vision for marketing

Our marketing challenge is to attract visibility quickly and we intend to accomplish this by
leveraging a multi-pronged approach that involves social media, email marketing and search
engine optimization strategies to gain market share. As we gain traction in the marketplace, word
of mouth will lift our game downloads significantly.

Objectives

1. Generate over sales of more than 10,00,000 bags in every month for a one year
2. Increase sales by 100% by the month of next month

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Target Markets

Our ideal customer is at the initial level Kirana stores and medical stores for selling our packing
bags

We also want to target readymade garment stores, vegetable markets, consumer durables as our
target market

Market Definition and Segmentation

We target two segments: Kirana stores and medical stores for our sells purpose. In both of these
segments, customers are day to day sellers which sell in large volume and they also want packing
bags on large quantities

Distribution Channels
Our area in terms of geographical regions are ahmedabad and Baroda for providing a packing
bag to both this cities and which is near by our production plant so in terms of distribution
channel.

We directly provide the product to the retailers with help of our delivery men by taking a
delivery van for that purpose.

We not use any intermediaries for distribution apart from our own efforts.

Competitive Forces

Competitive force is concern there are many players which are there in packing business and
they all are small players but in case of eco friendly packaging is concern there are no players
apart from various NGOs as a part of their social activities. So we have a great opportunity to tab
a market by producing this type of eco- friendly bags.

Communications

We will leverage social media and word of mouth for the vast majority of our marketing using
platforms such as Twitter, Facebook, Orkut and MySpace. These platforms are widely used by

22
the customers in our demographic market. We will make announcements via regular tweets and
updates to our fan page on Facebook.

The newsworthy component of our mobile games also makes it enticing for traditional media to
publicize a game that is related to a current news story.

We will also use our email marketing list which is comprised of people who have expressed
interest in knowing when we release new games. We have segmented our email list so that we
can send appropriate emails to media and different ones to actual gamers, our customers.

Promotion & advertisement

Promotion and advertisement play an important role in success of the company. Different
company use different techniques for advertisement and promotion for the product and service as
per the size and product of the company

As per as our company is concern we are a small player and we also take into consider an
environmental aspects for our promotion we promote our company by taking care of
environment.

We want to use following techniques in advertisement and promotion of our products.

1. The first and foremost thing we use is billboard and banner

2. We also give advertisement in local newspapers

3. We promote our product by setting stalls at commercial market and where more and more
grocery and kirana stores located, road shows to promote our product.

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 Assessment of risk

As we all know that risk is in each and every business so for that company has to identify the risk
factors which are affecting the operation of the business. Here in packing as specially eco
friendly packing there are number of risk involved into business. So in assessment of risk we
have to take into consider following thing under assessment of risk.

Evaluate weakness of business

• The first and foremost weakness of our business is that it is basically and eco friendly bag
we can not able to use plastic so for huge quantity our packing bag is not useful

• The second weakness of our business is that adaptation of our product by various
segment is also not possible because of conveniences of the customers

New technologies

As per as the technology in our business is concern as our product is eco- friendly we can not
able to use technology as per our convenience.

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 Financial plan

Start-up Summary

Start-up costs are shown in three areas. The first is in the start-up table, the second is within the
cash flow assumptions and the third is in the P&L.

1. Start-up expenses: legal (incorporation and trademark registration), stationery (business

cards and office supplies), etc., brochures, consultants (graphic design for logo and
packaging), research and development (architecture fees for store and trade fixture design).
2. Start-up costs expressed in year one cash flow: FF&E for first Rainbow retail store.
3. Start-up costs included within year one P&L: brand marketing, management staff, travel
costs to coordinate product development.

JANFEBMARCHStar Expenses Assets Investment

t
up12,00,00035,00,00
014,00,00033,00,000
particular

A Financial Plan
enables you to set a
"budget", against

25
which you measure
your expenditure.
To deliver you
project "within
budget", you need
to produce the
project deliverables
at a total cost which
does not exceed that
stated in the budget.

Using this financial

plan template, you
can create a
detailed budget
against which to
measure the success
of your project.

Manufacturing
budget for three

26
 months

(In term of lacs)

Particular
Projected 10,00,000 12,00,000 14,00,000
sales( unit)Loans
Desired ending - - -
inventory
Available for sale 10,00,000 12,00,000 14,00,000
Less:begining - 1,00,000 200000
inventory
Total production 10,00,000 11,00,000 12,00,000
required

Interpretation

So from the estimated budget data regarding production we can say that we have to produce as a
first month production 10 lacs and after that in second year 11 lacs and 12 lacs respectively for
efficient operation of our business.

Income statement for three months

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Particular JAN FEB MARCH
Sales 10 12 14
Less: cost of goods 4 5 7
sold
Gross profit 6 7 7
Operating expenses
Selling expenses 0.5 0.4 0.35
Advertisement 0.3 0.35 0.25
Salaries and wages 1.5 1.5 1.5
Depreciation 0.7 0.7 0.7
Total operating 3 2.95 2.8
expenses
Profit before taxes 3 4.05 4.2
Taxes 0.3 0.405 0.42
Net profit 2.7 3.645 3.78

Break even point calculation

Fixed costs: 2.2

Selling price: 0.75

Variable cost 0.5

BEP = Fixed cost

SP – VC/Unit

2.2

0.25 = 8.8 units

Human resurce plan

Human resource policies are important if your company wants to implement consistent human
resource policies, procedures and solutions. Our policies and job descriptions are professionally
written and fully customizable in MS Word format.

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Straight-forward, clear and concise HR Policies is important for a number of reasons. Failing to
implement policies leaves our company open to legal challenges, grievances and lawsuits,
especially if we inconsistently apply our human resources policies and our pay structure/system.
Grievances and lawsuits lead to:

• Increased costs that affect your profits

• Increased turnover
• Negative morale

Our company will avoid these problems because we implement hr policies and procedures.
Our company needs human resource policies and procedures that our staffs are treated equally
across a variety of employment issues

In our organisation most of the employees are lower level and they work as a labourer in our
organisation so we have to face many problems regarding them. But from the very initial we take
care of that by framing very strict policy regarding the matters like

1. Pay structure

2. Working hours

3. Working conditions

4. Incentives and benefits

In our company one of our partners is from HR so HR department handle by MR.Sandeep

Vaghela.

• Compliance to all applicable legal and other requirements to which we subscribe through

• Establishing effective Integrated Management Systems for Environment, Health & Safety

• Setting objective and targets for continual improvement in Environment, Health & safety
per performance

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• Executing projects and plans for improvement

• Imparting appropriate training to all individuals entering our premises

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