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Business Model for Jute bags manufacturing
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Managerial Economics
Business Modelfor Jute Products
Presented by:61 Anshari Naved Abdul
Vahid67 Dhuri Swapnil
Manohar74 Jain Ashish Ganpathlal77 Kadam Mandar
Prabhakar82 Khedekar Pooja
Shravan
Objectives:
• For creating pollution free environment as jute is eco-friendly products.
• Making low cost carry bags and fashionable jute products.
• To make jute products as a part of our daily living.
• Creating awareness about jute products.
• Last but not the least to earn profit.
Introduction:
• Jute is a natural fiber popularly known as ‘The golden fiber’.
• One of the cheapest and the strongest of all natural fiber.
• Jute is a bio-degradable eco-friendly item.
• India, Bangladesh, China and Thailand are the leading producers of Jute.
• India is the largest producer of jute goods in the world, while Bangladesh is the largest cultivator of raw jute.
Our Product Range:
Jute Bags
Printed & Decorated Jute Shopping Bags
Designer Laptop Bags
Jute Folders
Men’s Handbags
Market and Demand Aspects: • Every responsible citizen considering the black future of ours
next generation shall stop using plastic carrier bags used for shopping as much as possible.
• Plastic bags in general take anywhere from 20 to 1000 years to breakdown in the environment. The natural alternative is jute bag.
• Decorated jute bags and shopping bags are very much in demand both for domestic and international market.
• With the increase of population the scope of trade and industry is also increasing. As the bags are an essential commodity for human, so the demand of the product is growing day by day.
• The demands of the product remain consistent through out the year. So, it is presumed that there is a good scope for starting of such type of industry with a huge export potential.
Government Bodies:
• Jute Manufacturer Development Council (JMDC)
• National Centre for Jute Diversification (NCJD)
• National Jute Board (NJB)
Alternates and Substitutes:
• Paper Bags:- Manufacturing process of paper bags results in plenty of leftover waste.- Environmental Damage- They are meant for short term usage.
• Cotton Bags:- They are costly as compared to jute.- Scarce raw material
• Plastics or Polyethene Bags:
Manufacturing Process:
Laminated & Non-Laminated Jute Facbrics
Printing
Stitching and Finishing
Dispatching Market for Sale
Design & Size Cutting
Checking & Packing
Presumptions:• Unit will operate 9 hours daily and 25 days in month.
• Capacity utilization will be 75% which will remain constant.
• The salary and wages of staff has been taken as per present market rate.
• Cost of Assets, Raw Materials and Selling price of Finished product are those generally obtained at the time of preparation of Business Model.
• The rate of interest on Bank Loan may vary from time to time.
• Since the project is small the financial calculation has been done for one year only.
Financial Aspects:
Suggested LocationDahisar (East)Mira Road (East)
Production Programme for a year
Sr. No. Items Qty (Nos) Rate (Rs.) Total Amount
1 Jute Bags 75,000
35
2,625,000
2Printed & Decorated Jute Shopping Bags
30,000
65
1,950,000
3 Designer Laptop Bags 2,000
300
600,000
4 Jute Folders 7,500
30
225,000
5 Mens Handbags 3,000
260
780,000
Total 6,180,000
Financial Aspects:
Fixed Capital:
1. Land & BuildingWorkspace 750 sq. mtrs on long term monthly rental basis
Rs.20,000/-
Sr. No. Items Qty (Nos) Rate (Rs.) Total Amount
1 Industrial Sewing Machines 31K 5
7,500
37,500
2 Screen of Diff. Designs 15
350
5,250
3 Rubber Wiper 10
125
1,250
4 Dye Paste Stirrer 4
3,600
14,400
5 Cottage Steamer 1
17,500
17,500
6 Water Drum 2
1,500
3,000
7Scissors, Measuring Tapes and other Equipments L.S
3,800
Total 82,700
2. Machinery / Equipment
Financial Aspects:Fixed Capital (Contd.)3. Furniture & FixturesSr. No. Items Qty (Nos) Rate (Rs.) Total Amount
1 Cutting Table 1
1,700
1,700
2 Wooden Woking Table 2
2,000
4,000
3 Chair 5
500
2,500
4 Almirah 2
4,000
8,000
5 Reck 1
3,500
3,500
6 Electrical Fittings 4,500
7 Misc. Items (Stools) L.S 5,500
Total 29,700
Total Fixed Capital
Particulars Amount
Land & Building Nil
Machinery / Equipment 82,700
Furniture & Fixtures 29,700
Total 112,400
Financial Aspects:Working Capital per month
1. Salary & Wages Expenses
Sr. No.Particulars EmployeeRemunarrati
onTotal
Amount Annually
1Manager Cum-Supervisor (Promotor) 1
14,000
14,000
168,000
2 Accountant 1
10,000
10,000
120,000
4 Master Tailor and Cutter 1
8,500
8,500
102,000
5 Tailor 4
7,500
30,000
360,000
6 Skilled Printer 1
6,500
6,500 78,000
7 Unskilled workers / Helpers 2
4,500
9,000
108,000
8 Marketing and Salesmen 3
5,500
16,500
198,000
9 Peon / Chowkidar 1
3,500
3,500 42,000
Total 14
98,000
1,176,000
Financial AspectsWorking Capital per month
2. Raw Material Consumption
No. Items Qty Rate (Rs.) Total Amount Annually
1 Cloth for Shopping Bags 2200m 28
61,600
739,200
2 Laptop Bags 800m 35
28,000
336,000
3 Jute Floder 550m 18
9,900
118,800
4 Mens Handbags 1100m 30
33,000
396,000
5 Jute Fabric 9500 bags 13
123,500
1,482,000
6 Dye Stuff 15 kg 450
6,750
81,000
7 Chemicals and Auxiliaries L.S 3,500
42,000
8 Printing Gum 15 kg 50
750
9,000
9 PVC buckle or Bamboo Stick 1200 pcs. 1.50
1,800
21,600
10 Sewing Thread, Needle, Label L.S 4,500
54,000
11 Buckles, Hook, Runner, Chain, Lining etc.. L.S 3,500
42,000
12 Transportation & Freight 8,000
96,000
Total 284,800
3,417,600
Financial Aspects:Working Capital per month
3. Monthly other Expenses
Sr. No. Items Amount Annually
1 Rent 20,000
240,000
2 Electricity 11,500
138,000
3 Utilities 2,500
30,000
4 Office & Administrative Expenses 4,500
54,000
5 Travelling and Transportation 2,200
26,400
6 Repair and Maintainence 1,200
14,400
7 Sales Promotion 15,000
180,000
8 Misc. Expenses 2,500
30,000
Total 59,400
712,800
Financial Aspects:
Norms of Working CapitalSr. No Description Norms Margin Total Amount Margin Money
1 Raw Materials 1 month 25% 284,800
71,200
2 Wages & Salaries 1 month 100% 98,000
98,000
3 Utility 1 month 100% 2,500
2,500
Total 385,300
171,700 Total Working Capital per month
Particulars Amount
Monthly Other Expenses 59,400
Margin Money for Working Capital 171,700
Total 231,100
Financial Aspects:
Total Capital Investment
Means of Finance
Particulars Amount
Total Fixed Capital 112,400
Total Working Capital per month 231,100
Total 343,500
Sr. No. Particulars Total Amount
1 Promoter's Contribution (35%) 120,225
2 NCJD's Interest Free Loan (20%) 68,700
3 Bank Loan (45%) 154,575
Total 343,500
Financial Aspects:Profitability Analysis
Sr. No. Particulars Value (Rs)
a Sales Revenue 6,180,000
b Cost of Production
Raw Material 3,417,600
Utilities
30,000
Salaries & Wages
1,176,000
Rent
240,000
Repairs & Maintainence
14,400
Adminsitrative Overheads
54,000
Selling and Distribution Expenses
180,000
Electricity
138,000
Depreciation @ 10%
11,240
Interest on Term Loan @ 12.50%
19,322
Interest on Proprietor @ 10%
12,023
Total (b)
5,292,584
c Operating Profit (a-b) 887,416
d % of Profit on Sales 14.36
e % of Profit on Investment 258.35
Financial Aspects:Break Even Point Analysis
(75% Capacity Utilisation)
Sr. No. Particulars Value (Rs)
a Variable Cost: Raw Materials 3,417,600 Utilities 30,000 Selling and Distribution Expenses 180,000 Total (a) 3,627,600 b Semi-Variable and Fixed Cost Salaries & Wages 1,176,000 Repairs & Maintainence 54,000 Adminsitrative Overheads 54,000 Rent 240,000 Selling and Distribution Expenses 180,000 Depreciation @ 10% 11,240 Interest on Term Loan @ 12.50% 19,322 Interest on Proprietor @ 10% 12,023 Total (b) 1,746,584 c Sales Realisation 6,180,000 d Contribution (c-a) 2,552,400 e B.E.P = b/d*75 47.90
Marketing Strategies:
• Word of Mouth:• Comprehensive Website: • Social Marketing:• Direct Marketing:• Major Festivals:• Online Shopping Sites:• NGO Tie-ups:• Local Tie-ups:• Corporate Gifting:• Conferences and Seminars:
Future Scope:
• We will be focusing on more on product segmentation like introducing new products wallets, water resistance bags, designer’s ladies handbags etc.
• Expansion of our business by introducing new outlets at prime locations across the country which will result in creating more employment opportunities.
• To focus more on the Marketing:Promoting our eco-friendly products through newspapers, hoarding,
Radio etc. Ad Campaign.Focusing more on tie-ups like Award ceremony’s, Standard Chartered
Mumbai Marathon, DNA Half Marathon other the major event happens in Mumbai.
Conclusion:• These reusable 100% natural bags are biodegradable,
ethically sourced, eco friendly, long lasting. They are a sustainable alternative to plastic and most other Green or Eco-friendly type bags available in the market.
• As well as their stylish looks jute bags carry a positive environmental message about your brand when printed with your logo.
• Go plastic bag free and make a difference to our planet.
• Jute is– Natural Fibre– Biodegradable– Sustainable– Stylish– Reusable
Thank You