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Feasibility study For Establishing a plastic bottle caps Factory

An - Najah National University Faculty of Engineering Industrial Engineering Department. Feasibility study For Establishing a plastic bottle caps Factory. For Palestine Plastic industry Company. Prepared by:. Maram Abd Elhaq Najah Emoor Leena Maqboul Shahd Abu Baker. Supervised by:

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Feasibility study For Establishing a plastic bottle caps Factory

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  1. An - Najah National University Faculty of Engineering Industrial Engineering Department Feasibility study For Establishing a plastic bottle caps Factory For Palestine Plastic industry Company Prepared by: Maram Abd Elhaq Najah Emoor Leena Maqboul Shahd Abu Baker Supervised by: Eng.Nidal Dwaikat

  2. Establishing a plastic Bottle caps Factory The main objectiveof the Project is to represent the economic feasibility of Establishing Plastic Bottle caps Factory for the First time in West Bank.

  3. Methodology Financial Study

  4. Market study

  5. Main Consumers • شركة المشروبات الوطنية كوكا كولا جريكو (مياه) تابع شركة المشروبات الوطنية شركة الجيبور (مياه) كابي (عصائر) تابع شركة المشروبات الوطنية الشركة الهندسية المتحدة للتعبئة والتغليف Target market Top Drink (عصائر) مصنع نفخ وبيع العبوات البلاستيكية Tick plast شركة النور الحديثة لتكنولوجيا المياه. (مياه وعصائر) شركة الفردوس (مياه) شركة فلسطين للتنمية البيئية(ينابيع بيتا) (مياه)

  6. Survey

  7. Demand size

  8. Product Segment

  9. Market share Our study suggests to cover a percentage of nearly 40% from the whole market demand and that indicates to produce 50,800,000 cap

  10. Competitors The main suppliers for plastic bottle caps

  11. Technical Study

  12. Product specification Cap type Weight 1.85 2.55 3.7 Size Neck 28 Neck 30 Neck 38 Usage

  13. Capacity of project

  14. Manufacturing Process Injection molding machine Raw material (HDPE) Mold Injection Molding Process

  15. Molds Molds are typically made of steel or aluminum. The mold has many components, but can be split into two halves. The two main components of the mold are the mold core and the mold cavity.

  16. Raw Materials HDPE • AMRAZ • KOKSAN • SABIC

  17. Injection molding machine • Procedure: • Clamping. • Injection. • Cooling. • Ejection. The process cycle for injection molding is very short, typically between 2 seconds and 2 minutes.

  18. Machines Hopper Dryer Auto loader Injection Molding Machine Pallet wrapping machine Water Chiller

  19. Expenses • Constituent costs • Operational costs

  20. Constituent cost

  21. Land and construction cost

  22. Machines and Equipment • Injection auxiliaries molding machines • Molds

  23. Operational costs

  24. Raw material cost Neck 30 Neck28 Total $172760 Neck 38

  25. Cost Per item from raw material We consider unit item equal to 1000 caps Considering 3% waste

  26. General Operating Cost

  27. Cont….. • Maintenance • Insurance

  28. Cont……… • Depreciation • Advertising $20000 • Communication and Services $8333

  29. Annual Production cost

  30. Production cost / unit item

  31. Facility Layout

  32. Financial Analysis

  33. Basic assumptions • The financial study covers 15 years from the project operational life. • Internal rate of return (IRR) is calculated at 100% equity ratio. • Net present value (NPV) is calculated at 5% discounted rate. • A strategic plan for increasing production at a rate of 5% and operational cost at rate • of 2%.

  34. Direct and Indirect Costs

  35. Selling Price Profit Margin Is 40%

  36. Cash Flows VAT 15%

  37. Financial Indicators • Payback period (PBP) • The period required to recover the original investment outlay through the profits earned by the project. Which is found 4 Years

  38. Cont. …. • Internal rate of return (IRR) is the discount rate that makes the net present value (NPV) of all cash flows (both negative and positive) from a particular investment equal to ZERO. Which is NPV = F/ (1+i) n = 0. And Found IRR= 30%

  39. Cont. …. • Net presentvalue(NPV) • The Present value of an investment’s future Net cash flows minus the initial investments. Which is NPV= F/ And found Positively $1,605,504.

  40. Cont. …. Rate on investment (ROI) ROI 37% The rate on return is the average of the simple rate of return along the project life period

  41. Cont. …. Break even point (BEP) The point at which sales revenue equal production cost (The Point at which the project neither makes profit nor suffers loss)

  42. Sensitivity analysis • Increasing operating cost 4%. • Decreasing operating cost 4%. • Decreasing Sales 4%. • Increasing Sales 4%.

  43. First Case : Increasing operating cost 4%. IRR= 29% NPV=$1320749 PBP= 4.5 years

  44. Second Case : Decreasing operating cost 4%. IRR= 32% NPV=$1721559 PBP=3.5

  45. Third Case : Decreasing Sales 4%. IRR= 28% NPV= $ 1390406 PBP= 5 years

  46. Fourth Case : Increasing Sales 4%. IRR= 33% NPV= $ 1827521 PBP= 3.2 years

  47. Sensitivity factors changes effects on IRR

  48. Recommendation Our recommendation based on the Positive Financial results which encourage to Perform this project. And so we recommend Palestine Plastic Industrial Co. to Establish the Factory which will gain a good market share.

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